The 's Product Life Cycle Theory

Ownership advantages could be intangible assets like technology and information, managerial, marketing and entrepreneurial skills, organisational systems, access to intermediate or final goods markets, a production process, patent and blueprint. The ownership advantage includes some firm specific valuable market power or cost advantage on the firm sufficient to outweigh the disadvantages of doing business abroad. They are closely related to the technological and innovative capabilities and the economic development levels of source countries.

From 2004 to 2012, the quantity of remote direct ventures has expanded more than the double, achieving USD 1,500 billion of every 2012. FDI has turned out to be one of the significant techniques for cross-outskirt venture and a standout amongst the most dynamic drivers of monetary development. Presently, I will propose a portion of the dangers of FID from the perspective of

Dunning’s OLI paradigm (1976) is used to support firms to locate its production in countries that are financially beneficial for them. According to Dunning, “the paradigm offers a holistic framework to take in consideration all of the important factors that influence the decision of a MNE.” (Stefanović, 2008, p.241) FDI is determined through the composition of the three powerful advantages; ownership, location and internationalisation as shown in figure 1. The thesis is to assess, ‘why go multinational?’, ‘how to choose the best location?’ and ‘what actions have to be taken to enter a foreign market?’

Foreign firms deciding to entrer a host country face numerous options of entry modes, which include equity joint ventures, wholly foreign owned enterprises, acquiring existing firms, franchising and licensing, contractual joint ventures, representative offices, build-operate-transfer and so forth. However, the most important process a foreign company should do before deciding an entry modes is to make sure it know the targeted market very well by considering the production factor, the market factor, and environment factor in host country.

As indicated by the stage approach, the firms initiate their business by offering the items in their home markets and after that they accordingly take a gander at new neighboring nations. The two fundamental models can be distinguished inside of the stage approach: the Product Life Cycle Theory by Raymond Vernon (1966; 1971; 1979)

S. Hymer formulated monopolistic advantages (ownership) theory in 1960 (published in 1976). The theory is considered as one of the most prominent microeconomic theories of FDI. It supports that a company makes a decision on foreign investment based on its desire to capitalise on certain advantages that are owned by the firm and not shared by local (competing) firms that are operating in the host country. These competitive advantages include operational finance, technical knowledge, management and/or marketing advantages in the foreign country that could influence a firm’s decision to relocate aboard (Dunning and Lundan, 2008).

The product life cycle theory is used to comprehend and analyze various maturity stages of products and industries. Product innovation and diffusion influence long-term patterns of international trade. This term product life cycle was used for the first time in 1965, by Theodore Levitt in a Harvard Business Review article: "Exploit the Product Life Cycle".

When a firm decides to go international with their business they must face many competitive decisions. Two of the most important decisions a company will face are the pressures for cost reduction and pressures for local responsiveness. The pressure of cost reduction forces a firm to lower their value of the cost of creation. Firms can outsource to places where costs of their products are much cheaper or they can mass-produce a standardized product in one location. A firm must have the feeling of local representation. Every country has its own way of life. If a company does not adhere to each country’s differences in traditional business practices, distribution channels, and the demands

As globalization intensifies, the business community tends to expand its operations towards the international market. This can be as a result of intense competition in the local market, need to increase sales and profits margins, to enhance the company’s prestige, to create jobs, to increase the value of the entrepreneurs among others (Bodie, 2013). Before going global, the company’s executive has to consider factors that favour or hinder their goal towards achieving international recognition in trade. This paper reviews the topic on “Making an Investment in a Foreign Market and factors considered.

With the increase of trades, more goods and services crossing national borders and spreading its influence abroad. For instance, Macdonald is a huge franchise that many investors have invest in developed and developing countries. It is an American brand that is now a household name in Europe, North-East Asia, South-East Asia, and of which shows how far globalization has spread. FDIs can also help to create more jobs for by investing in more companies and further increase more investments flowing in. As FDIs is one of the key instrumental in affecting the economy, globalization can help to further facilitate the movement of it which supports the argument of the optimistic globalist.

Tourism pattern is not steady but rather unsurprising; Butler 's life cycle model have made it simple for us to comprehend the lifecycle of traveller destination. With his, the product life cycle (PLC) of five stages which incorporate Exploration, Involvement, Development, Consolidation, Stagnation, Decline, and Rejuvenation. We will look at that how 'wellington ', ‘Bhutan ' and ‘Antarctica ' lies on the bend of PLC. Different elements have been considered to assess that how these destinations have come to the point of revival.

• In relation to the Eclectic paradigm, companies that have low levels of ownership advantages either do not enter foreign markets. If the company and its products are equipped with ownership advantage and internalization advantage, they enter through low-risk modes such as exporting.

In this paper we will analyse the main exogenous (FDI) and endogenous (entrepreneurship) policy prescriptions used in economic development.

Foreign Direct Investment (FDI) is one of the biggest tools for international economic integrations. Firms view overseas expansion as a necessary step to achieve a more effective access in the markets where they presently have low representation as stated by Tyu T. and Zhang M. M. (2007). In order to take advantage of the aggregate economies offered by the blooming innovative environment in that particular region, firms of course will invest heavily in an advantaged location to compete with other countries. According to Changwatchai P. (2010), FDI has become more important for the economic growth and development of many countries. FDI can deliver capital, a means to pursue global strategic objectives, and a means to access technology and skills to the host country. Attracting FDI is an important issue of concern to many developing nations.

The research questions of the paper can be explicitly written down as: what is the impact of FDI on Economic Growth in Developing countries? What are the other factors which affect Economic Growth in Developing countries? It is important to mention here that this research addresses developing countries and the external validity of this research to developed countries is not advocated. To