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The Product Life Cycle Theory is an economic theory that was developed by Raymond Vernon in response to the failure of the Heckscher–Ohlin model to explain the observed pattern of international trade. The theory suggests that early in a product's life-cycle all the parts and labor associated with that product come from the area where it was ...
Vernon was born Raymond Visotsky in New York; his parents were Russian Jewish immigrants and he and his siblings changed their family name to Vernon. [1] He earned a B.A. cum laude from the City College of New York in 1933 and a Ph.D. in economics from Columbia University in 1941; [2] all three of his siblings also earned doctorates.
As first articulated by Raymond Vernon in 1966, a product goes through a life cycle consisting of four stages: "new product", "growth product", "maturity product" and "obsolescence product". The conditions in which a product is sold change over time and must be managed as it moves through this succession of stages.
Adler was influenced by the writings of Hans Vaihinger, and his concept of fictionalism, mental constructs, or working models of how to interpret the world. [1] From them he evolved his notion of the teleological goal of an individual's personality, a fictive ideal, which he later elaborated with the means for attaining it into the whole style of life.
The theory originates from the work of Raymond Vernon, who described the development of international trade in terms of product life-cycle – a period of time during which the product circulates in the market. Vernon stated that some countries specialize in the production and export of technologically new products, while others specialize in ...
This theory would also be extended to humans. Alfred Adler (1879–1937) measured "activity" (connected with "energy") against "social interest", yielding the four "styles of life": [3] Ruling or Dominant type: high activity, low social interest; Getting or Leaning type: low activity, high social interest; Avoiding type: low activity, low ...
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The key for the theory is the rate of diffusion of technology. Moving on to 1966, Vernon further extended the technology gap model into the product life-cycle theory. [2] The degree of maturity of the technology became the new key of the dynamic economic trade. Vernon's theory resonances with the technology gap theory.