Market Approach Method

Market approach method

Name: Jhon Bairo Rojas Beltrán Course: Valuation and Negotiation of Technology Group: 212032_31 Date: October 15, 2022

NATIONAL OPEN AND DISTANCE UNIVERSITY (UNAD)

Market approach method

Comparable trade transactions can be said to be a suitable and effective means of deciding the cost of an asset prior to trading a purchase or sale. The same approach could be effective for trading licences, although it may not be as effective because the same intellectual property or technology assets will rarely be traded. Inconvenience is more likely if there is a single worldwide license. If the license is not unique, or if it is unique in a different geographic area, the subsequent licensee may know, or at least understand, the previous licensee's terms and conditions. In addition, non-exclusive licensees are sometimes required to provide details of subsequent licenses, or are able to request, by requiring "the rights of the most licensed licensee", to enable them to enter into more favorable subsequent agreements with with your state. However, the reasoning of a comparable license agreement concluded in the same industrial sector could be much more effective, since it could provide other bases or references to carry out a special valuation of a certain technology.

This method could be calculated as follows: Consumer Psychology + Product Quality = Selling Price

• Future Revenue Based Approaches: This approach involves forecasting future revenue streams from technology and converting them into a present value. The income generated by other intangible assets is not relevant. It is important to note that the conversion of income to a present value refers to cash, not accounting profits.

• Comparable transactions/industry-based approaches: This comparative approach is based on benchmarking of similar technologies or agreements made on technologies in similar phases. If relevant market information on prices, royalties or investments is available, this approximation may represent the most reliable and adjusted way of valuing the technology.

Market-based approaches are based on the potential economic revenue that could be obtained from products/services developed from the technology. This valuation can be used to determine the sale price, the percentage of royalties or the level of investments in the business. They can be divided into two types:

A business innovation is an improvement in business activity through changes in business models, processes, organization, products or marketing to make the business more efficient and achieve a better position in the market. One type of innovation is: Market: Implementation of new marketing methods, including significant improvements in the merely aesthetic design of a product or packaging, price, distribution and promotion.

How can companies create value from their innovation?