I (Meaning and importance of Exports) Unit Structure

(e) 
One Country Production Base 
A firm may maintain one country production base. Preferably 
in the domestic market, due to various lacational advantages such 
as low cost labour, or availability of cheap materials. However, the 
distribution could be done in several world markets. For distribution, 
the firm may use either company owned distribution channels, or 
foreign controlled distribution channels. 
(f) 
Licensing 
 
Under international licensing, a firm in one country (the 
licensor) permits a firm in another country (the licensee) to use its 
assets such as Patents, Trademarks. Copyrights, Technology, 
Technical know-how, marketing skills or some other specific skills. 
The monetary benefit to the licensor is the royalty or fees, which the 
licensee pays.
 
(g) 
Contract Manufacturing 
Under contract manufacturing, a company contracts with 
firms in foreign countries to manufacture or assemble the products 
while retaining the responsibility of marketing the product. This is a 
common practice in the internationals business. 

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70 
(h) 
Acquisitions 
It involves purchasing another company already operating in 
a foreign country market where the firm wants to enter. Synergetic 
benefits can result if the firm acquires a unit with strong goodwill 
and a good distribution network. Research indicates that a wholly 
owned subsidiary is more successful in international markets as 
compared to joint ventures. However, proper information must be 
obtained before acquiring a foreign firm. 
(i) 
Turnkey Contracts 
In case of turnkey contracts, a foreign company plans and 
constructs a project and hands it over to the government or a 
domestic private company for execution. Such practice is common 
in oil, steel, cement and fertilizer sectors.