Question

1.) Describe the changes in production requirements and the location of production that take place over the three phases of the product cycle.

Answer 1

first stage- a new product is innovated. normally a developed country does this. as the product is very new its sells will be low as the market for the product is low. it is said that the product will be innovated in the developed country is because the peoples from developed countrys have these extra money to spend on new product which they dont know will work or not. To neutralise  the impact of low sale firms  will keep the manufacture of the product to the local level only.so that as the need arrises to modify the product in its beginning  stage, changes can be implemented without too much risk . as salles increases the firms start to export the product to other developed nations. this is basically a stage of internationalisation of the product.

second stage- here when the product is established in other developed nations the firm will start establishing branches and industries in those areas so that the transportation and other expenses will be cut down.product development may take place at this stage if needed. The increased product exposure will start to reach  the less developed economy, and demand from these nations will start to grow.

third stage- export of the product to the less developed nation will begin. in this stage no further development in the product will take place, in this stage the low developed nation will start to produce the product due to the exposer to the product and technology. the demand for the product in the origine nation will start to decline because of the new innovation of products, then the cycle begins again.