The Metro Corporation

Technology licensing negotiation

By
K. Hari Krishna( 1226210115)
Hima teja ( 1226210116)
Gunasekaran( 1226210113)
 Metro Corporation
 Metro corporation is a diversified steel rolling, fabricating
and construction company .

 It as far more frequently focused on licensing as a

market entry method with technologies confined to ---

1) process and peripheral to the steel making process.

2) Applications of steel in construction and other industries

 All metro licensing is handled by its international division,

International construction and engineering ( ICE)
 Impecina
 Impecina is a private firm and largest construction company in Peru
and operates throughout Latin America.

 It has broad range of interests including residential and commercial

buildings, hydraulic works, transportation and maritime works.

 It employs several thousand personnel, engineers and technicians,

its sales had doubled in the last five years.

 It was still primarily a Peruvian business with most turnover in Peru,

but was in the expanding into Colombia, the north African
Mediterranean countries, Argentina, Brazil and Venezuela
 Licensing as an entry mode

 Licensing is a nonexport entry mode

 Licensing is a cross between export and direct
investment
 The licensor is exporting whatever the agreement is
concerned with
 At the same time it is an investment which will give them
future cash inflow
 The licensing package for Impecina

*Luostarinen og Welch(1990) Other supportive

components may
include:
Design

Technical Copyright
Trademark core.
Technical
know how:
Patents
Managerial
know how
Marketing know-how
 Strengths
 Well established corp.
 Diversified
 Developed reputation
 Experienced in licensing
 Technologically advanced
 Weaknesses
 Few and far between innovations
 Avoidance of patenting outside US
 Insufficient license agreement
 Opportunities
 Expanding market
 Impecina is a considerable actor in the
Peruvian market
 Patenting outside US
 Cooperation with Impecina in other
countries
 Threats
 Cultural differences
 Peruvian governmental regulations
 Competition from other US companies
 Impecina can copy/steal Metros
technology
 Metro Corporation: Technology
Licensing Negotiation
Licensor Licensee

Licensing agreement
Metro Corp. Impecina

Metro Corporation give Impecina the right to use their name and
petroleum tank technology in exchange for an initial payment
and 2 % royalties.
 Metro’s Benefits
Effective technology
transfer

Licensing
Feedback/market Other joint
knowledge Relationship operation
Development possibilities

Renewed/enchanced
licensing agreement
 Action Plan
 Possible actions
 Accept formal offer
 Reopen negotiation
 End negotiation
 Critical Success Factors
 Cultural understanding
 Make sure Impecina does not become a
competitor, due to lack of control over
production & marketing
 Understand reasons for government
intervention
 Technology innovation based on market
development
 The final agreement – active involvement
 Negotiation technique
 Short Term Goals
 Secure patents outside US
 To make sure that the license agreement
operate successfully
 To provide Impecina with all the technical
training and resources (know-how) they
need to be successful for Metro
 To develop a good relationship with
Impecina
 Long Term Goals
 A long term profitable cooperation
 Gain of tactical and strategic advantages
related to expansion in foreign markets
 Using the licensing agreement as a
steppingstone strategy
 To recognize and act upon opportunities
 Conclusion
 Preserving patents is a key issue
 If the cooperation is to be successful, we
recommend that the agreement is
renegotiated in accordance with the
action plan