What is licensing as a foreign market entry?

Licensing is defined as "the method of foreign operation whereby a firm in one country agrees to permit a company in Another Country to use the manufacturing, processing, trademark, know-how or some other skill provided by the licensor".

It is quite similar to the "franchise" operation. Coca Cola is an Excellent example of licensing. In Zimbabwe, United Bottlers have the licence to make Coke.

Licensing involves little expense and involvement. The only cost is signing the agreement and policing its implementation.