Q1. Is the experience of the United States, as described in the case, consistent with the pattern of international trade? Explain international trade theories and illustrate the pattern of trade with information provided by the case. 1. According to case, United States invented most of the information technology that we use today. In the 1980s, the locus of growth in the sector shifted to personal computers and the innovations of companies like Intel, Apple Inc, or IBM had developed mass market for products. However, in the early 1990s something happened to this uniquely American industry so as to let the industry has moved to production of commodity components had moved offshore. Later on, this trend might affect the economy in U.S., but some evidence show that the United States actually benefited from the shift. Thus United States export their product to foreign country to increase the life of product for earning profits continually. Therefore the trade pattern with this international trade is product life cycle. A product life cycle refers to the time period between the launch of a product into the market till it is finally withdrawn from it. In a nut shell, product life cycle or PLC is an odyssey from new and innovative to old and outdated. This cycle is split into four different stages which encompass the product's journey from its entry to exit from the market.
This cycle is based on the all familiar biological life cycle, wherein a seed is planted (introduction stage), germinates (growth stage), sends out roots in the ground and shoots with branches and leaves against gravity, thereby maturing into an adult (maturity stage). As the plant lives its life and nears old age, it shrivels up, shrinks and dies out (decline stage).
In terms of introduction Stage, it is for the sake of the theory. After conducting thorough market research, the company develops its product. Once the product is ready, a test market is carried out to check the viability of...
Please join StudyMode to read the full document