MANAGEMENT

Detailed explanation-1: -Theory suggesting that a firm initially establish itself locally and expand into foreign markets in response to foreign demand for its product; over time, the MNC will grow in foreign markets; after some point, its foreign business may decline unless it can differentiate its product from competitors.

Detailed explanation-2: -The life cycle of a product is broken into four stages-introduction, growth, maturity, and decline. A product begins with an idea, and within the confines of modern business, it isn’t likely to go further until it undergoes research and development (R&D) and is found to be feasible and potentially profitable.

Detailed explanation-3: -Maturity – In the maturity stage, sales slow down, indicating that the market has begun to reach saturation. This is also one of the stages of the product life cycle when pricing becomes competitive. This makes the profit margins thinner.

Detailed explanation-4: -In the maturing product stage, mass-production techniques are developed and foreign demand (in developed countries) expands; the US now exports the product to other developed countries. In the standardized product stage, production moves to developing countries, which then export the product to developed countries.