Finalibus

CONSULTING GROUP
Jack Hannah
Tom Jenkins
Michael Sharp
Nicola Stewart
Sebastian Zuloaga
IBUS 12-250
iBUS
International Strategy
Report

3
TABLE OF CONTENTS
Objective Statement...............................................................................................................................
Strategy and Mode of Entry...................................................................................................................
Introducing a License............................................................................................................................
What is a license?........................................................................................................................
Characteristics of a License.........................................................................................................
Lenght & Production Scheme ..........................................................................................
Rights of the licensee.......................................................................................................
Compensation.................................................................................................................
Protection for the licensor...............................................................................................
Advantages of licensing Beam .......................................................................................
Assesment of Possible Licencees..........................................................................................................
Negotiation Guidelines.........................................................................................................................
Cultural Protocols........................................................................................................................
Language / Culture.........................................................................................................
Business Etiquette...........................................................................................................
Meeting Protocol.............................................................................................................
Licensing Agreement...........................................................................................................................
Preliminary Agreement...............................................................................................................
Contractual Agreement...............................................................................................................
Grant of Rights ................................................................................................................
Type of License ...............................................................................................................
Sublicenses ....................................................................................................................
Rights Licensed...............................................................................................................
Manufacturing Specifications .........................................................................................
Compensation.................................................................................................................
Royalties .........................................................................................................................
Lump Sum Payments .......................................................................................................
Development ..................................................................................................................
Territory .........................................................................................................................
Minimum Requirement....................................................................................................
Managing the License...........................................................................................................................
Type of License............................................................................................................................
Time Frame..................................................................................................................................
Territory......................................................................................................................................
Auditing.......................................................................................................................................
Conclusion.............................................................................................................................................
Bibliography...........................................................................................................................................
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2
EXECUTIVE SUMMARY
This report provides an analysis, evaluation and recommendations on a strategy that Beam Labs Inc.
can implement in order to penetrate the international market.The evaluation of pathways to the inter-
national market started with the scanning of different regions that could be targeted, and establishing
the disadvantages and advantages of each region focusing on the characteristics of the Beam projec-
tor.The analysis then focuses on recommending a single entry strategy and all the factors to consider
for this entry strategy to be implemented successfully.
Through a cautious analysis and evaluation, we found that the best region to target is Continental
Europe.To reach this region, it is recommended that Beam Labs Inc. penetrate the Hungarian market.
Hungary posed a set of positive factors such as low cost of labour and skilled workers.For the country,
with all its factors, IBus consulting grounp recommend a global entry strategy.
The focus on the report then shifts to understanding what a license is, as licensing is the entry mode
that has been established as the most efficient for Beam. The report identifies licensing as a contractu-
al agreement in which a party authorises another to use its intellectual property or other property,
using their name and brand. Different characteristics of a License are outlined such as the length,
exclusivity agreements and sub-licensing.
The main section of the report consists in the recommendations on the possible licensees,the negotia-
tions of the license within Hungary, and the management of the license. Recommended licensees
range from American companies,to European,and Hungarian companies.The possibilities were eval-
uated in regards to the characteristics of the product and the advantages and disadvantages each
company proposed. Finally, the report outlines the procedures of negotiating with organisations in
Hungary, and how to manage the license once the licensing agreement is set.
The report concludes with the following recommendations:
• Enter the European Market with a global strategy, using Hungary as location of operations
• Enter into a licensing agreement with one of the recommended company to ensure quality
production as well as access to distribution channels in Europe
• Enter into the licensing agreement for recommended length of 3 years,giving exclusive rights
to the licensee and limiting the rights to be used only within Hungary while enabling distribution to
cover Continental Europe
• The licensing agreement, as recommended, must establish a value of around 7% of the price
per unit as the amount of royalty to be paid to Labs Inc. per unit sold for the rights to manufacture.
• Auditing must be conducted at least once a year through a visit to the manufacturing plant in
order to assess quality control and ensuring the production process is implemented well.
• Beam Labs Inc. must ensure that they aid the licensee in areas such as marketing; similarly
Research & Development at home should be implemented to constantly improve the product and take
one step to ensure that in the future they have new improvements to be able to secure further licenses.

4
Objective Statement
Beam Labs Inc. has commissioned a report by IBUS Consulting Group in order to create a recommen-
dation for a strategy to penetrate and sell their product in the international market.The aim is to com-
mercialise the Beam Projector on a international scale.
Through detailed analysis of regions and strategies of entry which could be used to introduce Beam
into the international market, IBUS Consulting Group aims to create comprehensive analysis of an
effective analysis that can be implemented by Beam Labs Inc. in order to become an international
brand and product.

5
Strategy and Mode of Entry
The Beam Projector is leading the market in portable projection. Beam Labs Inc. have already
achieved the first mover advantage.Now the firm needs to look at extending the product lifecycle.The
suggested strategy for Beam labs Inc. is the Global International Expansion Strategy. This strategy
could allow Beam Labs Inc. to keep overall control of the product, whilst still continuing innovate and
development.
The first and vital step in achieving a Global Strategy is to source location economies.Location econo-
mies are when a firm looks to reduce its overall production costs these include; Cost of labor, cost of
energy and cost of distribution1
. When scanning for regions to achieve location economies for Beam
Labs Inc. IBUS Consulting found the following criteria to be of the highest importance. This first cut
was done by excluding regions with; high wage costs2
, inexperience in lighting/technology manufac-
turing and low population centers3
.
The regions of Asia and Eastern/Central Europe were found to be the most attractive for the Beam.
Due to the Beam Projector being a market leader, IBUS Consulting made IP security a high priority4
.
For this reason we excluded Asia from our final cut. Asian countries are rank from 23 to 96 out of 97 in
the International Property Rights Index of 2014. The Eastern and Central Europe countries most
attractive for the Beam ranked from 27 to 36 out of 97. The security of IP combined with the higher
skilled work force and comparative labor costs made Eastern and Central Europe most attractive for
Beam Labs Inc.
Abiding by the above criteria it is suggested that Hungary be the country to produce the Beam projec-
tor.With the EU’s fastest growing economy Hungary is increasing in GDP by 3.9% per quarter5
. The
continued growth of the country has attracted many of the world largest electronics companies to man-
ufacture there.Hungary also has an established lighting industry.The country also boasts a 99% litera-
cy rate6
; this is on par if not better than most developed countries. With the high literacy rate the Hun-
garian workforce has become one of the cheapest yet highly skilled in the world. The Globe strategy
is accommodating standardization. This is where the product is the same across all markets. With
standardization comes centralised control; this allows little responsiveness at the local level. Beam
Labs Inc. can control the global brand across all markets from their US location.With global company
goals and policies being integrated this could achieve a sustainable competitive advantage. The
chosen strategy also allow for fast product development.By having all the managerial and R&D opera-
tions in the one location you create streamlined development, approval and production processes.
When taking in to consideration the size of Beam Labs Inc.it is suggested that the most attractive mode
of entry in to Hungary is a Licensing agreement.
Criteria
Cost of Labour Low
Low
Medium
Low-Medium
High
High
Medium-High
Low
IP Security
SkilledWorkers
Ease of Distribution
and Cost
Asia Eastern / Central
Europe
1
Kelly, C. (2010). Location economies. ArticlesBase.com. Retrieved 12 April 2015, from http://www.articlesbase.com/economics-articles/loca-
tion-economies-2219114.html
2
Ilo.org,. (2009). Data collection on wages and income. Retrieved 10 April 2015, from http://www.ilo.org/travail/areasofwork/wages-and-income/W-
CMS_142568/lang--en/index.htm
3
Cigno, A. (1971). Economies of scale and industrial location. Regional Studies, 5(4), 295-301. doi:10.1080/09595237100185341
4
Internationalpropertyrightsindex.org,. (2015). International Property Rights Index 2014. Retrieved 10 April 2015, from http://internationalpropertyright-
sindex.org/countries?f=ipri&o=desc&r=AO
5
Politics.hu,. (2015). Hungary economy EU’s fastest-growing in Q2, says Varga. Retrieved 15 April 2015, from http://www.politics.hu/20140903/hunga-
ry-economy-eus-fastest-growing-in-q2-says-varga/
6
Europa.eu,. (2015). Hungary in the EU. Retrieved 9 April 2015, from http://europa.eu/about-eu/countries/member-countries/hungary/index_en.htm

6
INTRODUCING A LICENSE
What is a license?
Characteristics of a License
Rights of the licensee
Compensation
Licensing is a contractual business relationship between a seller (licensor), in this case Beam Labs
Inc., authorises a buyer (licensee) to use the sellers’ (licensor’s) patent, trademark, copyright or other
form of “intellectual property” for a type of compensation6
.The relationship is formally recorded in a
legal document or contract known as a licensing agreement, terms and conditions are stated.
The key elements of the business relationship are recorded in the license agreement document7
. In
basic terms, licensing is the process of allowing a company to produce products and services under
the name of another.
The property provisions in the licensing agreement is where the ‘licensor’ details the ‘license’, the
length of time the licensee is able to exploit the ‘license’, the quality of the raw materials used in the
manufacture of the‘license’and the quality of the final product produced.This section will also include
any information in regards to product specifications.
The length of the agreement should be of sufficient time for the licensee to recoup their investment.
This should also allow for the ‘licensor’ to terminate the agreement if the licensee breeches or fails to
exploit fully. It is common for the term to be in multiple steps of time 3 years, 5 years and 7 years with
the ability to renegotiate terms or terminate at each point.
The territory provision is where the ‘licensor’ determines the geographic region(s) the licensee is
permitted to exploit with the license7
. It is important for the ‘licensor’ to ensure they hold the relevant
patents for the established geographic location.
If the ‘licensor’ grants exclusivity to the licensee it will prevent the ‘licensor’ entering that region to
exploit the ‘license’ either on their on behalf or by granting another licensee8
.
This royalties provision determines the financial value of the ‘license’, how the compensation for use
will be calculated,how much will be paid and how often payments will be made to the ‘licensor’9
.Roy-
alty payments can be negotiated in three common formats, (1) Upfront payment, where payment is
made at the commencement of the agreement, (2) Running or ongoing, where payments are made as
a percentage of an agreed metric,and (3) Minimum or fixed dollar amount,where the payment is inde-
pendent of any metric.Whichever method used,it is important to establish record keeping methods to
quantify the amount of royalties to be made using a specific metric.
6
Udell, L. J. (2014, 03). Negotiating a license:The components to success.The Licensing Journal, 34, 10-13. Retrieved from http://search.proquest.com/-
docview/1509425553?accountid=26503
7
Progoff, S. (2014, 08).The basics of negotiating trademark license agreements.The Licensing Journal, 34, 7-16. Retrieved from http://search.pro-
quest.com/docview/1552907417?accountid=26503
8
Progoff,S.(2014,08).The basics of negotiating trademark license agreements.The Licensing Journal,34,7-16.Retrieved from http://search.proquest.com/-
docview/1552907417?accountid=26503
9
Lenght & Production Scheme

7
Advantages licensing “Beam”
Protection for Licensor
The license agreement should contain protection provisions from damage to either the ‘license’ and,
or the ‘licensor’.These provisions include infringement notification, breach and cure, and termination
of the license agreement10
.
This section requires licensee to communicate any infringement of the agreement and provide any
remedies or performance that would be implemented in the case of a breach of contract. Finally,
upone a breach of a condition of the contract, this section would detail circumstances under which the
licensor is allowed to terminate the licensing agreement.
There are numerous advantages to Beam Labs Inc. entering into a licensing agreement over selling
their property (Beam) outright. Licensing or giving a third party the right to exploit your property
(Beam) for a specific period in a specific market for profit allows Beam Labs Inc. to:
o Save time and money required to invest to perform the business functions of manufacturing,market-
ing, distribution and sales in-house.
o The potential to generate income over a long period of time through royalties.
o Bring the property (Beam) to market is a shorter time period.
o Ability to exploit the expertise of an existing business in manufacturing, distribution, marketing or
sales where Beam Labs Inc. may not have these expertise or abilities in-house.
o Bring a product to market if the expected sales volumes are small.
o The ability to enter into multiple similar agreements for different markets, in most cases simultane-
ously, whilst retaining ownership of the property (Beam).
10

8
ASSESMENT OF POSSIBLE
LICENCEES
Organisations that will be considered as licensees are manufacturers of consumer electronics and
manufactures of hardware.The product is a combination of wires,plastic,metal and bulbs,materials
which will be easily available to electronics manufacturers. Additional factors include access to
distribution channels, manufacturing quality of organisation, and confidentiality of information and
patent.The following table shows some recommendations of possible licensees,organised by rank-
ing of the best options.
Disadvantages
-Swedish quality in product develop-
ment
-Ensured channels of distribution to the
rest of Europe
-Negotiating power in Chain of Distribu-
tion
-Swedish company, which means culture
of company close to culture of Hungary
-Leading organisation in the lighting
industry
-Extensive channels of distribution
around Europe
-US based company, just as Beam Labs
-Hungarian company, management will
know how to operate in Hungarian
markets
-Secure in keeping information as it is
solely a Hungarian company
-Possible concerns of confidential
information passed from Hungarian
branch of Electrolux to other branches
or HQ
-Possible difficulties in negotiating with a
Swedish company located in Hungary
-General Electric might want to develop
product in the US as well, against
possible interests of Beam
-Not as much Supply Chain Management
power
-Not a worldwide known brand
-Not as much access to big distribution
channels for the rest of Europe
1
2
3
Ranking AdvantagesCompany
Name
Electrolux
General
Electric
Videoton
4 Siemens
3M5
-German quality in product development
-Ensured channels of distribution to the
rest of Europe
-Negotiating power in Chain of Distribu-
tion
-German company, which means culture
-Does not specialise in production of
electronics like Beam
-Possible concerns of confidential
information passed from Hungarian
branch of Siemens to other branches or
HQ
-Possible difficulties in negotiating with a
German company located in Hungary
-Extensive channels of distribution
around Europe
-US based company, just as Beam
-3M might want to develop product in
the US as well, against possible interests
of Beam
-3M focuses on other product categories
and not so much on projectors and
lighting

9
NEGOTIATION GUIDELINES
When entering licensing agreements internationally it is critical to observe appropriate business
etiquette for the country that you are planning to enter,for the purpose of this report we have outlined Hun-
garian business protocol.
Hungary is a central European country with a population of approximately 9.8 million people11
. Of their
population, approximately 98% of the population speak the official language of Hungarian12
. Hungary is a
highly educated country and many businessmen will speak English or German,however,it may be neces-
sary to organise a translator to assist in the negotiation of the licensing agreement.When entering busi-
ness negotiations avoid topics such as politics, salaries, living costs, minority groups, and religion13
.
Hungarians have a formal business culture, where trust is paramount to the success of business negotia-
tions. They will be forthright when conducting business, expecting honest and well prepared answers,
with the expectation that they will be able to negotiate the business agreement14
. Hungarian business
protocol focuses on building relationships with business partners often requiring lengthy or multiple
meetings to build trust15
.When entering into licensing negotiations do not expect to reach a deal immedi-
ately and always follow up verbal agreements with written agreements. Due to recent signing of interna-
tional conventions against corruptions, bribery and corruption is no longer common in business transac-
tions, with Hungary ranking 46th on the Transparency International Corruption Perception Index 201216
.
There are a few key points to remember when conducting business in Hungary.
•Always shake hands with potential business partners, men should wait for a woman to extend her
hand17
•Wear formal business attire for all business meetings, and do not take your jacket off without
permission18
•Punctuality is critical, try to arrive early for business meetings19
•Gift giving is not compulsory for business negotiations, however, business cards will be
exchanged upon meeting
Hungarians are very traditional when conducting business meetings as they focus on creating relation-
ships with potential business partners, ensure that you are polite and honest at all times.
Cultural Protocols
Lanugage / Culture
Business Etiquette
11
"Hungary." Hungary.World Bank, 2013.Web. 10 Apr. 2015.
12
"Hungary - Language, Culture, Customs and Etiquette." Hungary. Kwintessential, n.d.Web. 10 Apr. 2015.
13
"Hungary." Business Culture. Passport to Trade, n.d.Web. 10 Apr. 2015.
14
"Business Etiquette." Business Culture. Passport to Trade, n.d.Web. 10 Apr. 2015.
15
16
17
18
Ibid.
19

10
Meeting Protocol
Preliminary Agreements
When conducting meetings with Hungarian business partners expect the negotiations to last for an
extended period of time. Initial meetings are focused on determining whether you are trustworthy,
therefore, engage in small talk and do not move the conversation to business yourself20
. Avoid using
high-pressure sales tactics, and ensure that your contracts are clear and concise with reasoning to
support what you are asking for.Hungarians will not enter hastily into an agreement;they will want to
fully understand the venture and the licensing agreement before entering into a contract.
Hungarians are likely to be formal in their initial negotiations; however, most business meetings will
involve eating, drinking and entertaining21
. Initial negotiations will generally take place in an office
or restaurant, with some meetings involving sightseeing. In the rare event that you are invited to a
Hungarian’s house for dinner ensure to bring a box of chocolates, liquor from your country of origin
or flowers22
.To ensure success when negotiating in Hungary, ensure to respectful, polite and honest.
Once a suitable manufacturer has been chosen for Beam, it will be necessary to work out a contract
that considers the following recommendations.
The intellectual property owned by Beam Labs, Inc. is invaluable to the success of the company;
therefore any negotiations entered with any licensee should begin with a confidentiality agreement23
.
Intellectual Property is prone to being stolen and a confidentiality agreement will prevent the licen-
see from being able to reproduce the product or share the information discussed to others who could
profit from the knowledge.
20
21
22
"Meeting Etiquette." Business Culture. Passport to Trade, n.d.Web. 10 Apr. 2015.
23
"Successful Technology Licensing." IP Assets Management Series (n.d.): n. pag.World Intellectual Property Organisation.Web.
Licensing Agreement

11
Contractual Agreements
Grant of Rights
There will need to be a clear statement made in the contract granting the rights for the licensee to
manufacture the Beam product and for the time period that they will be granted. IP licenses last for
periods of three, five or seven years.
Type of License
Beam Labs,Inc.will need to clearly detail the type of license that is being granted to the licensee.The
type of license is an intellectual property rights license, which will grant the licensee permission to
use the patent, but will allow Beam Labs, Inc. to maintain ownership of the product. This section will
also need to detail that exclusivity of the license. It would be recommended for Beam to arrange a
non-exclusive license or sole license. A sole license will enable the licensee and Beam Labs, Inc.
exclusive rights to use the licensed technology24
. A non-exclusive license will allow Beam Labs, Inc.
to negotiate new licensing agreements and will allow both the licensee and licensor to use the tech-
nology25
.
A non-exclusive license is recommendable, as it will enable the Beam product manufacturing to be
expanded around the globe as its demand grows.
Sublicenses
Sublicenses are licenses granted by the licensee to produce or manufacture the product. Beam Labs,
Inc.will need to address whether the licensee has the right to sublicense the Beam.Sublicensing may
be an important source of revenue for the manufacturer if they are unable to cover the region they
have been assigned, or if they are a part of a corporate group with multiple subsidiaries that may be
better at manufacturing the Intellectual Property26
. In the event that Beam Labs, Inc. decides to allow
sublicensing the contract must include; who is responsible for determining appropriate sub-licen-
sees, protocol in the event that the license is terminated, and any terms and conditions associated
with a sublicense such as royalties27
.
Rights Licensed
This section needs to explicitly detail the rights that Beam Labs, Inc. is giving to the manufacturer. As
the Beam is patented technology it will be the right to use, sell, and manufacture the licensed prod-
uct28
.
Manufacturing Specifications
In the licensing agreement IBUS recommends to outline the manufacturing specifications for each
individual part of the Beam product to the licensee.The licensee will need information regarding the
types of materials that need to be used and the level of quality that the product should achieve.
Therefore Beam Labs,Inc.will need to ensure in the contract,that materials used and the manufactur-
ing standards are equivalent to those used in the United States.
Compensation
Licensing agreements for intellectual property have two methods of compensation; royalties or lump
sum payments.These can be calculated using the cost method, market method, or income method29
.
24
Ibid.
25
Ibid.
26
Ibid.
27
Ibid.
28
Ibid.
29
"Successful Technology Licensing." IP Assets Management Series (n.d.): n. pag.World Intellectual Property Organisation.Web.

Royalties
These are payments that the licensee makes to the licensor for the use and sale of their product.They
are generally calculated based on a per unit of product sold, revenue, or gross/net prices. Irrespec-
tive of the method used it is necessary to agree on how the royalties will be calculated and any neces-
sary provisions on the license.The licensee may want to impose a cap or maximum on the amount of
royalties paid which will limit the profits made by the licensor. The licensor may want to impose a
minimum amount of royalties to be paid by the licensee30
. It would be recommended for Beam Labs,
Inc. to try and impose a minimum in order to ensure a stable source of revenue for the product.
Royalties would be the recommended form of compensation for Beam Labs, Inc, with the potential to
negotiate a lump sum payment to cover the start-up and legal fees of the licensing agreement. Beam
Labs, Inc. should aim to negotiate royalties of approximately 7%, which can be calculated as a
percentage of the revenue of the licensee or the amount of products sold.
Lump Sum Payments
Lump Sum Payments are generally made at the beginning of the licensing agreement, and can be
paid in instalments to the licensor31
.They are commonly used in addition to royalties often for start-up
businesses, to help them develop their products or run everyday business functions32
. As Beams
Labs,Inc.is a new company;a lump sum payment could be a valuable option until royalties are a suffi-
cient source of revenue.
As Beams Labs, Inc. is a new company; we recommed that during negotiations Beam Labs ask for a
lump sum payment of around $50,000 to cover some, if not all the costs of negotiating the license.
Development
For the purpose of this license, Beam Labs, Inc. will remain responsible for the development of the
product; the licensee should only be designated manufacturing rights.
Territory
For the purpose of licensing in Hungary you will want to ensure that the contract specifies the territo-
ry that the license covers.In this instance,you will want a license that covers continental Europe as far
as the borders of Ukraine and Turkey.
Minimum Requirement
A minimum requirement is simply requiring the licensee to manufacture and sell a minimum amount
of the Beam product per designated time frame.This will ensure that they are meeting quantity stand-
ards and that they are not sacrificing the production time of the Beam to other contracts.
Therefore Beam Labs, Inc. should propose a minimum requirement of approximately 200,000 Beam
products per year.
12
30
Ibid.
31
Ibid.
32
Ibid.
Ibid.

Managing the License
Type of License
Time Frame
Territory
Auditing
The licensing agreement would be classified under a sole intellectual property rights licensing,
meaning that the patent of the design for beam would be the only intellectual property that is shared
between the two companies evolved in the contract whereas,being a sole license means that only the
licensee and the licensor can use the licensed intellectual property or technology33
.
The time period of the license can vary, as there is non-stop communication between the licensee
and the licensor throughout the entirety of the contract1.This also applies to creating the contract as
time varies on the negotiations of the licensing agreement and whether the licensee and the licensor
come to an agreement. In the case of Beam, Beam Labs, Inc. would negotiate a 3-year license.
It is recommended that the license spans over continental Europe, up unto and including Romania,
Slovakia and Poland. Hungary holds a strategic position within Europe, enabling ease of distribution
and low transportation cost, and being apart of the European Economic Area means that there is free
trade between the target area markets34
.
Auditing is the examination of the financial report of an organization – as present in the annual report
– by someone independent of that organization35
.
Auditing would be included within the licensing agreement during the negotiations, as auditing the
manufacturing company anually would reveal any faults in the financials, which in turn would show
shortcomings in the manufacturing of the product, the materials used for the product, the quality of
the product and the effect rate of the product.
Auditing,in the context of managing the license (not taking into account marketing,R&D,etc.) will be
used as a tool to expose any fraud and/ or misuse of funding of the manufacturing company in Hunga-
ry.A thorough assessment of the company’s financials would reveal the purchases and output of mate-
rials, which can then be compared to the agreed upon financials during the negotiations. This could
then be further specified into the material used and their costs, the quality of the materials used and
its costs, how the product is being produced and the costs, and the defect rate and its costs, which all
related back to the overall production of the intellectual property.
Auditing must be conducted at least once a year through a visit to the manufacturing plant in order to
assess quality control and ensuring the production process is implemented well.
13
33
Innovation, European Commission's Executive Agency for Competitiveness and. (2013). Commercialising Intellestual Property: Licence Agreements.
Alicante: European Commission's Executive Agency for Competitiveness and Innovation.
34
European Free Trade Association. (2015). EEA Agreement. Retrieved April 14, 2015, from European Free Trade Agreement: http://www.efta.in-
t/eea/eea-agreement
35
PriceWaterhouseCooper. (2015).What is an Audit? Retrieved April 14, 2015, from PwC: http://www.pwc.com.au/assurance/financial/statements/au-
dit.htm

Conclusion
As a final step of the report, IBUS Consulting Group would like to recap the following recommenda-
tions:
•Enter the European Market with a global strategy, using Hungary as location of operations
•Enter into a licensing agreement with one of the recommended company to ensure quality produc-
tion as well as access to distribution channels in Europe
•Enter into the licensing agreement for recommended length of 3 years,giving exclusive rights to the
licensee and limiting the rights to be used only within Hungary while enabling distribution to cover
Continental Europe
•The licensing agreement, as recommended, must establish a value of around 7% of the price per
unit as the amount of royalty to be paid to Labs Inc. per unit sold for the rights to manufacture.
•Auditing must be conducted at least once a year through a visit to the manufacturing plant in order
to assess quality control and ensuring the production process is implemented well.
•Beam Labs Inc. must ensure that they aid the licensee in areas such as marketing; similarly Research
& Development at home should be implemented to constantly improve the product and take one step
to ensure that in the future they have new improvements to be able to secure further licenses.
The next step for Beam Labs Inc. is r to develop a busines plan and model specificially tailored for
Hungary, or the region and country chosen.The business plan will help in setting goals for the inter-
national entry as well as procedures and other courses of action to be followed.
14

Bibliography
15
Udell, L. J. (2014, 03). Negotiating a license:The components to success.The Licensing Journal, 34, 10-13. Retrieved from http://-
search.proquest.com/docview/1509425553?accountid=26503
Progoff, S. (2014, 08).The basics of negotiating trademark license agreements.The Licensing Journal, 34, 7-16. Retrieved from http://-
search.proquest.com/docview/1552907417?accountid=26503
Cigno, A. (1971). Economies of scale and industrial location. Regional Studies, 5(4), 295-301. doi:10.1080/09595237100185341
Europa.eu,. (2015). Hungary in the EU. Retrieved 9 April 2015, from http://europa.eu/about-eu/countries/member-countries/hunga-
ry/index_en.htm
Internationalpropertyrightsindex.org,. (2015). International Property Rights Index 2014. Retrieved 10 April 2015, from http://interna-
tionalpropertyrightsindex.org/countries?f=ipri&o=desc&r=AO
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