--%>

Vernon’s product life-cycle theory of the FDI

Discuss the Vernon’s product life-cycle theory of the FDI. Specify the strength and weakness of theory?

E

Expert

Verified

As per, theory of the product life-cycle, firms take on FDI at the particular stage in life-cycle of the products which they primarily introduced. When new product is introduced, firm chooses to keep the production at home, close to the customers. However, when product gets mature and develop the foreign demands, firm can be induced to start the production in foreign countries, particularly in low-cost countries, to serve local markets and also to export the product back to home country. Theory of product life-cycle may explain the historical development of FDI quite well. In current years, though, international system of production has become too complex to be described neatly through the life-cycle theory. Such as, new products are generally introduced at the same time in many countries and production facilities may be situated in several countries simultaneously.

   Related Questions in Financial Accounting

  • Q : Matlab Applications in Digital Signal

    Digital signal processing appears like a nightmare for students as it is most difficult and tricky subject in engineering core curriculum. If you are getting troubles in digital signal processing assignment or related project, then move

  • Q : What are Personal accounts What are

    What are Personal accounts. Describe their types?

  • Q : Find the expected dividend for each of

    Suppose a firm's common stock paid a dividend of $1.75 yesterday. You expect the dividend to grow at the rate of 8% per year for the next 3 years, if you buy the stock, you plan to hold it for 3 years and then sell it.

    Q : Financial report Details of Assignment

    Details of Assignment : You are required to form a team (group) of 3 to 4 m embers. Let your lecturer know the names of your team members. Select a set o f financial statements for a group of companies and obtain approval from your le cturer for the group of companies that you have selected.

  • Q : Prepare the journal entry to record the

    On December 31, 20x1, the Kat Co. purchase a group of four assets for a total cost of $1,000,000. An independent appraiser assesses the fair value of each asset asfollows: Asset Fair Value Land $350,000 Building 600,000 Equipment 200,000 Fixtures 150,000 Prepare the journal entry t

  • Q : Trends in international business

    Explain three important trends which have prevailed in the international business during last two decades.

  • Q : Define Expenditures Define Expenditures

    Define Expenditures with suitable example?

  • Q : Acc company A began operation on

    company A began operation on january 1,2012. The annual reporting period ends December 31.The trial balance on January 1,2013 was as follows

  • Q : Benchmarking A way to improve

    A way to improve performance that investigates the way several different entities do the same activity and finds the best way to accomplish the activity. The best ways then become the standard or the benchmark for all the entities.

  • Q : Explain Discount Briefly explain the

    Briefly explain the term Discount and also describe their important types?