Raymond Vernon

American Economist
How a product matures and declines because of internationalization??

There are three stages contained within Vernon Siri namely the new product stage, the maturing product
stage and the standardized product stage.
In addition, Vernon categorized the world into three different groups, the innovating country, other advanced
countries and less developed countries.
Let's discuss each of these stages
separately:-

1. New Product Stage:-

The cycle always begins with the introduction of a
new product:
• In this stage, a corporation in a developed country
will innovate a new product;
• corporations will keep the manufacturer of the
product local;
• The market for this product will be small and sales
will be relatively low;
• As sales increase corporations may start to
export the product out to other developed nations
to increase sales and revenue.
Maturing Product Stage
• The product has firmly established demand in the innovating country and other
advanced countries;
• Opening up production plants in other advanced countries to reduce the production
cost and meet the increasing demand;
• It begins to reach the countries that have a less developed economy.

Standardized Product Stage

• Driving down the production cost by moving facilities to nations where the average
income is much lower;
• Demand in the original nation where the product came from begins to decline and
eventually dwindles;
• Another new cycle starts.