The paper "Advantages and Disadvantages of International Business Theories" is an engrossing example of coursework on business. The business environment has become multi-dimensional in nature on the international forum. The political, social, economic, and technological aspects of any country are subjected to rapid changes over time. Post-trade liberalism, the degree of market uncertainty has substantially increased in most world economies. As a result, profit-making organizations are subjected to cut-throat competition in the market (Gionea, 2008). The managers in various organizations try to logically analyze changes of the global forces before formulating new or downsizing the existing business strategies.
However, along with empirical analysis, theoretical knowledge is also a crucial component of business management. The essay tries to theoretically and empirically estimate the advantages and disadvantages of certain international business theories. Presently, the degree of market competition and consumers’ preferences are greatly volatile in nature. Under such critical situations, companies and their native countries can become successful by appropriately assessing the rationale behind different business theories (Cawsey, Deszca, and Ingols, 2011). International Product Life Cycle Theory Raymond Vernon had introduced a theoretical model in 1966 in order to analyze the pattern of internationalization adopted by multinational organizations (Ayal, 2012).
Vernon had applied the concepts of Ricardo’ s comparative advantage theory and the conventional theory of the Product Life Cycle to build the International Product Life Cycle model (Ayal, 2012). The theory claims that trading partners in the international business world change over time. The International Product Life Cycle theory is divided into three sections. New Product This stage is initiated when a company operating in a developed nation introduces a new technologically innovative product in its native market (Ayal, 2012).
The company manufactures and sells the new product in the same nation for two primary reasons.
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