Question

A product is invented in Country X and is first manufactured there. The International Product Life Cycle Theory holds that the product will be manufactured in developing countries within a couple of years. T/F

Answer 1

Answer:

False

Explanation:

International Product Cycle is a model that patterns international manufacturing & trade of product . It has 4 stages :

• Introduction - Innovated Invention in a developed country. Limited production & consumption, no competition
• Growth - Spread to other developed countries, foreign production & competition starts, consumption & coverage rise.
• Maturity - Spread to developing countries, stagnant growth in developed countries & fast growth in less developed countries
• Decline - Spread to less developed countries, technology outdated, various substitutes emerge & no. of sellers decline, demand still exist in less developed countries.

So: the next stage after 'Innovated Invention' in a developed country X is - its growth in other developed countries, not 'manfacturing in developing countries' (reflected in 3rd maturity stage).