Question

Which of the following is true about the product life-cycle?

1) It is a main driver of international expansion
2) It creates higher profits for the company from a larger customer base
3) Going international can change the position of the product on the global life-cycle stage
4) All of the above

Answer 1

All the provided statements about the product life-cycle are correct. Expansion into international markets can rejuvenate a product's life-cycle, increase customer base, and, consequently, profits.

Step-by-step explanation:

The product life-cycle is an important concept in business that influences international expansion, competition, and profits. Looking at how economies of scale apply to international trade, we see that when a few large producers supply a product, an economy can achieve efficient production costs. However, without international competition, consumers have limited choices, and innovation stagnates.

International expansion is driven by the product life-cycle because it allows companies to seek new markets once domestic demand plateaus. Taking a product global can increase profits and customer base, and introducing a product to different international markets can indeed alter its stage in the product life-cycle by rejuvenating demand or extending its maturity stage.

True Statements about the Product Life-Cycle

1. It is a main driver of international expansion.
2. It creates higher profits for the company from a larger customer base.
3. Going international can change the position of the product on the global life-cycle stage.

All of these statements are true, making option 4 the correct answer.