Fox et al. (2005)

Management > Global Firm > Lectures > Independent Research > Fox et al.

Fox, Wasson, Hofer, Anderson and Zeithaml, Hill and Jones (2005)

As an industry matures, a firm will want a product to become a cash cow (BCG matrix), owning a good share of the market and bringing in revenues at relatively little cost.
Product lifecycles are becoming shorter, but the operating life is lengthening for some products, like automobiles and appliances, meaning that firms need to take into account market and service life of their products. Companies attempt to extend their product lifecycles by offering upgrades and warrantees and spare parts etc. Thus the concept of lifecycles has a “significant impact on business strategy and performance”

There are four stages: introduction, growth, maturity and decline. (One could argue that underdeveloped countries get the product not until it has reached maturity or decline, meaning that they cannot be taken full advantage of)

(Product cycle model can be perceived at global or domestic level[?])

Product cycle mechanism with FDI transfer, and the technology transfer (Hung, N, 2004)
The world trade pattern today is that developed countries create technologies and diffuse them to less developed countries.

Development of a product begins in the North, due to its HR and R&D capabilities, then the product becomes standard and is transferred to the South.
Describes a “moving equilibrium”, where exports of a product from the North eventually become exports of the South.

Takes a perspective which makes the South seem more pro-active, imitating the North’s technologies for themselves, rather than passively receiving them.