ChapTwo外文文献.ppt

2. The maturing product stage At this stage the best product using the most efficient production process has emerged and the form of the product has become stabilized. As consumers have better knowledge of the product, the demand for the product becomes more price-elastic. Under these circumstances it is important to achieve a lower cost of production. The firm is now a mature oligopolist. Facing the difficulties of expanding at home, the firm will eventually find it necessary and profitable to invest abroad. Charateristics: Consumption becomes substantial in other developed countries. Production shifts to other developed countries, mainly through the activities of multinational corporations. Price becomes increasingly important to purchasers. Production runs begin to lengthen. 3. The standardized product stage At this stage, the product is by now completely uniform and non-differentiated, and the production processes are commonly known. Competition among firms is entirely on prices. The foreign firms in the host countries now meet competition from the local firms which may even export some of their products to the home country of the foreign firms. As a result, the firms of the investing country have to look for host countries other than developed countries so that they can achieve further reductions in costs. Eventually these firms have to set up subsidiaries in developing countries to perform part or the whole of the production processes. The products produced in the subsidiaries are not for sale in the local market but for exporting back to the home country or the other developed countries. Characteristics: Worldwide consumption of the product. Production shifts to low-wage, industrializing countries or regions. Price becomes most important to purchasers. Production techniques are standardized and emphasizes long lengths of run A firm is often attracte Product Life Cycle Characteristics Stage Intro. Growth Maturity Decline