International Product Life Cycle Case Study

Question 1.1 – International Product Life Cycle International Product Life Cycle or IPLC explains the process of an exported product of a certain nation becoming an imported product of it. It is like this : company A located in country A is producing and selling product A in its own country. Product A gets famous, and consumers in foreign country(country B) start buying it. The export volume grows. Once there are enough consumers in country B to support the local production of product A, company B in that country starts producing product A’ - very similar with product A, so that it can fill the needs of customers in country B. Company B can reduce time and cost of transportation and local communication, and as the time goes by it gets experience,

‘Upcycle’ means ‘to process (used goods or waste material) so as to produce something that is often better than the original.’ Freitag(means ‘Friday’ in German), established by Markus & Daniel Freitag brothers in 1993, is the 1st-generation upcycled bag producer and is based in Switzerland. It stated as a small-scale business, making backpacks and messenger bags out of used truck tarpaulins, seatbelts, and bicycle inner tubes. Originally, Freitag was targeting only on Swiss domestic market. But it became popular quickly, and now it has various overseas stores, including ones in other Europe countries and

If a company has tangible or intangible resources that other companies don't have, the company has an ownership specific advantage. If a foreign market that the company wants to exploit has some positive characteristics that would help the company when it locates into the market directly rather than just to export products to it, then the company has a location specific advantage. And if a company has internalized other supplier companies so that the company can get materials not through the market, then that would be an advantage for investing to the foreign market too. For example, Philip Morris(PM) Korea produces and sells foreign brand cigarettes(e.g. Marlboro, Parliament etc.) in Korea. That can be a location specific advantage, since the transport cost will be lowered, and by manufacturing cigarettes in Korea, the company does not have to pay tariffs. Plus, when it produces some of those cigarettes, PM Korea uses Korean tobacco leaves. Furthermore, PM launched ‘Oasis,’ a cigarette brand that is designed and developed for Korean smokers. Designing a new brand targeting on only one market can be the ownership specific advantage of a