UGF Lecture 4

Management > Global Firm > Vernon > 1. Product development > 2. Mature product > 3. Standardised product

Stage 3 - Standardised product stage

At this stage the technology is widely available and many firms are producing mass-market versions of the product. Now the market has become very price competitive (high price elasticity of demand), so firms strongly seek low cost locations for production.

Vernon predicted (and this actually happened over the next 30 years) that MNEs could separate where products were produced and where they were sold, meaning that companies would locate their production facilities in low-wage economies.

Changes