Abstract
In 1995, Oviatt and McDougall pioneered a new model based on a new type of entrepreneurial company and called them 'International New Ventures', or INVs. Their model described four main elements that are necessary for the development of a successful and competitively sustainable INV, which included:
1. Element 1: Internalization of Some Transactions
2. Element 2: Alternative Governance Structures
3. Element 3: Foreign Location Advantage
4. Element 4: Unique Resources
Throughout Oviatt et al. (1994)'s discussion, it is apparent that licensing is an attractive business model for INVs, especially for those operating in the information technology (IT) industry.
However, no work has since surfaced that clearly explores how each of the four elements of Oviatt et al. (2005)'s model is affected by one's licensing decisions. This gap must be filled as the number of INV IT licensing companies dramatically increases worldwide (Aggarwal, 1999), and much needed advice is sought by the managers of these companies. This paper offers a matrix by which to analyze this topic. Ideally this paper will instigate a new wave of research that addresses the idiosyncrasies associated with being an IT INV who employs one of the following three types of licensing models:
1. Non-Exclusive Licensor: Multiple Licensees
2. Collaborative Network Licensor: Cross Licenses with Business Partners
3. Exclusive Licensor: One Licensee
By highlighting the dynamics that occur between these three licensing models and. Oviatt et al. (1995)'s four elements, the fundamental reasons for why a company has, will, or should choose one particular licensing model over another becomes clear. As such, this paper builds on past theory, breaks new ground and offers fresh, relevant and pertinent insights for the innovative IT INV licensing companies of today.