VERNON'S INTERNATIONAL PRODUCT LIFE CYCLE

Vernon's International Product Life Cycle

Vernon's International Product Life Cycle

Introduction

The main purpose of this paper is to make an analysis on the application of Vernon's International product life cycle on a company, and describe the ways through which the finance, marketing and human resource management sections have contributed to the international success of the company. The chosen company in this paper is the Xerox Corporation which is an American based company. Xerox Corporation is a multinational document management company which ahs the functions to produce and sale a wide range of black and white printers, digital production printing presses, multifunction systems, and related consulting services and supplies. The headquarter of Xerox is located in Norwalk, Connecticut. Xerox Corporation has made the announcement of acquiring Affiliated Computer Services for $6.4 billion. It has closed this deal on February 8, 2010 (Vernon1986, p. 67).

Xerox has started its operations in 1906 in Rochester. It has started its operations as the Haloid Photographic Company, which had the functions of manufacturing the photographic paper and equipments. Later on in 1958, the company changed its name to Haloid Xerox and then in 1961, it again changed its name to Xerox. The company has achieved the fame in 1959, by introducing the Xerox 914. It is the first plane paper photocopier which has its usage in the process of Electro-photography. This technology has been discovered by Chester Carlson. With the passage of time, the Xerox Company has gained the success because of its effective technologies. Thus with the passage of time, the success and popularity of the company kept on growing. The main reason behind the success and growth of the company is the globalization process which the company has adopted. This process of internalization and globalization has made the company achieve the success. Thus, it has changed the HRM, finance and marketing sector of the company (Porter, 2000, p. 15).

Vernons life cycle

The Vernon's international life cycle theory is an economic theory that has been developed by Raymond Vernon in response to the failure of the Heckscher- Ohlin model to explain the evolution of international trade.

1. New product

2. Matured product

3. Standardized product

1. New product: When Xerox developed country wants to benefit from technological progress with the launch of new products in the domestic market. These markets are likely to begin the development of the nation, as a higher-income consumers can buy and are willing totry new, expensive items (elastic low price). In addition, easier access to capital markets to finance development of new products.

2. Matured product: Product design and manufacturing processes are becoming more stable. Foreign direct investment (FDI) in production to reduce unit costs as the costs of labor and transportation costs fall (Mudambi, 1999, p. 65). Offshore production facilities are designed to serve local markets, as a substitute exports from its domestic market. Production of Xeroxstill requires highly skilled, highly paid employees. Competition from local companies gets started quickly on these non-domestic markets ...