Vernon's theory of the product life cycle. The concept of porter's competitive advantages. Using the theory of the international life cycle of a product

R. Vernon's theory and its application in practice. Completed by: E.S. Liszt.

The theory of the product life cycle.

The life cycle of a product covers 3 stages:

Using the theory of the international life cycle of a product

Questions:

10. Arrange the life cycle stages in the correct order:

11. Vernon used the ____ concept of the product life cycle to explain international trade.

12. To what stage does the following belong: "reduction of the cost of production of goods and their prices":

13. Vernon's theory presents a ______________ model of international trade:

14. Possession of technologies inaccessible to other countries is:

The author of the first version of the theory of the "product life cycle" was a professor at Harvard University R. Vernon. According to R. Vernon, New Product went through a cycle consisting of several stages, or stages - introduction, rapid growth, deceleration, expansion, maturity and aging.

At the first stage, a new product is produced in small batches. Its technological development takes place in industries and countries that are at the forefront of scientific and technological progress. Making a new product requires more skilled labor than mass production of standard products. The new product is being implemented at the first stage, mainly in the domestic market of the country where it was created.

At the second stage, there is a great demand for new products abroad and their production in other countries is being established. As a rule, the movement goes from developed to less developed countries. Vernon argues that this process is directed from the United States to Western Europe and Japan, which are significantly inferior in terms of spending on research and development. researchers and engineers.

At the maturity stage, the cost of product development decreases, the number of competing similar products increases, and international trade in them peaks. Maintaining demand for them is mainly only through lower prices, which inevitably leads to increased attention in the cost of labor. In this regard, production begins to move to developing countries.

Finally, at the fourth stage, the product ceases to be new, it grows old, its production begins to decline, because does not bring more profit, and disappears from the market.

This model has many obvious disadvantages. Although the production of new goods gives certain advantages and allows obtaining monopoly high profits, this monopoly is temporary in nature, i.e. it is not about "using knowledge." The model does not give an idea to what extent the duration of the stages of the cycle can fluctuate, whether it is measured in years or several decades. “The life cycle of products such as Scotch whiskey, Italian vermouth, French perfumes has been going on for centuries,” notes the American magazine Harvard Business Review. The sequence of technology transfer from the United States to Western European countries and then to developing countries is not necessarily followed. Technological innovations have been developed and transferred back through transnational corporations with laboratories in developing countries.

It is not true that the cycle begins with the United States: they are no longer the only innovator in new product launches. For example, the Dutch company Philips and the Japanese companies Sony and Matsushita invented the video recorder.

L8.COMPLEX COMPOUNDS AND THEIR PROPERTIES.

Separate chemical elements interacting with each other form compounds of the first order: oxides, acids, bases, salts; which, reacting with each other, form compounds of a higher order - complex compounds.

Cu (OH) 2 + 4NH 4 OH = (OH) 2 + 4H 2 O

AgCl + 2NH 4 OH = Cl + 2H 2 O

Complex compounds - substances whose molecules consist of inner sphere (complex ions ) - the central atom or metal ion ( complexing agent ) directly related to a certain ( focal - cch ) the number of other molecules or ions ( ligands ), and external sphere - ions of the opposite sign. K, A.

Werner's coordination theory.

The theory was created in 1893.

Complex compounds are characterized by the presence of a central ion - a complexing agent (d - elements: Fe, Co, Cu, Zn, Mo, Mn; less often p - elements: Al, Sn, Pb; of s - elements only Li).

The central ion is surrounded by ligands, which can be particles with a free pair of electrons (Н 2 О :,: NH 3,: Cl -). The number of ligands is determined by the coordination number, which is usually twice the oxidation state of the complexing agent.

The complexing agent and the ligand form the inner sphere of the complex, the charge of which is defined as the algebraic sum of the charges of all complexing agents and ligands. +3 Cl 3 -.

The outer sphere contains ions of the opposite sign.

Nomenclature.

First called the anion, and then the cation.

If the ligand is an acidic residue, then prefixes indicating their number and the ending "o" are added to its name. Then the neutral ligands are named, adding prefixes indicating their number.

Further, the ion of the complexing agent is called with an indication of the oxidation state (in the letter it is indicated by Roman numerals in parentheses). In anionic complexes, the suffix "at" is added to the name of the complexing agent. In cationic complexes, Latin names are given to metal ions.

For example: (OH) 2 - tetraamminecopper (II) hydroxide;

K is potassium tetracyanodiammine ferrate (III);

Cl 3 - hexaamminecobalt (III) chloride.

The nature of chemical bonds in complex compounds.

Currently, to explain the chemical bonds in complex compounds, they use valence bond method (BC) ... Based on the VS method, it is assumed that a donor-acceptor bond arises between the ligand and the complexing agent due to the lone pair of electrons of the ligand and the free orbital of the central ion. Thus, the ligand is a donor, and the complexing agent is an acceptor.

A connection was established between the structure of the molecule and the coordination number.

If the coordination number is two, then this indicates that the complexing agent provides 2 free sir– hybrid orbitals to the undivided pairs of ligands, and the complex acquires a linear structure.

kh = 2 s + p = 2q + = 2

If the coordination number is four, this indicates that the complexing agent provides free 1s and 3p– hybrid orbitals to the undivided pairs of ligands, and the complex acquires a tetrahedral structure.

kh = 4 s + 3p = 4q

If the coordination number is six, this indicates that the complexing agent provides free 1s, 3p, and 2d– hybrid orbitals to undivided pairs of ligands, and the complex acquires an octahedral structure.

kh = 6 s + 3p + 2d = 6q

Stability of complex compounds.

The external and internal spheres of complex compounds differ greatly in stability. Particles located in the outer sphere of the complex are easily split off (dissociate) - primary dissociation. It flows completely, like with strong electrolytes.

K 4 → 4K + + 4-

The ligands located in the inner sphere of the complex are firmly bound to the complexing agent and will be cleaved off to a lesser extent. The process will be reversible. Reversible disintegration of the inner sphere - secondary dissociation. It obeys the law of mass action and is characterized by an equilibrium constant called the constant of instability of a complex ion - K n . The lower the value of the instability constant, the more stable the complex.

4- ↔ Fe +2 + 6CN -

K n = ∙ 6 / [4-]

There is a value inverse to the instability constant - complex ion stability constant - K mouth .

K mouth = 1 / K n = [4-] / ∙ 6

The value of the stability constant can be used to calculate the standard Gibbs energy of complex formation.

In the mid-60s of the 20th century, the American economist R. Vernon put forward a theory explaining the development of world trade in finished goods on the basis of their stages of life.

According to Vernon, a new product goes through a cycle of four stages, or stages - introduction, rapid growth, deceleration and decline, which correspond to the stages of introduction, expansion, maturity and aging. The international movement of goods depends on a specific stage in the life cycle.

In the first stage, the technological development of a new product takes place in industries and countries that are at the forefront of scientific and technological progress. The production of a new product at this stage is small-scale, requires highly skilled workers and is concentrated in the country of innovation (usually an industrialized country). It is sold mainly in the domestic market of the country where it was created.

At the growth stage, the demand for the product grows, not only the volume of sales in the domestic market increases, but also the export from the country of innovation expands, competition intensifies, a tendency to increase the capital intensity of production is manifested, preconditions are created for organizing and developing production abroad.

After some time, the concept and technology for the production of a new product become so matured that additional knowledge is no longer so necessary to reduce costs. As soon as a product becomes more familiar and standardized (mature), its production in a country with a high level of technology becomes meaningless. The production of this product is moved to other countries, which may use already standard technology. First, these are developed countries. At the stage of maturity, the number of competing similar products increases, international trade in them reaches a peak, and the saturation of the market begins to be felt, primarily in the country of innovation. Maintaining demand comes mainly through lower prices, which leads to increased attention to the cost of labor. At the same time, technology can be so embodied in the equipment being sold that special qualifications are no longer required for the production of the product itself, and it will move to the countries of the Third World, which have a surplus of cheap labor.

At the fourth stage, the product stops being new, it gets old. The market is shrinking in developed countries ah and a large concentration of production in developing countries. Developed countries are becoming net importers of the product because with aging and standardization, production technologies finally lose their comparative advantage. The production of an already mature product is taking root in less developed countries due to the fact that sooner or later their advantages associated with cheap labor will outweigh the (and diminishing) lag in the technical level, which will allow them to export the product in question on the basis of comparative advantage.

Leading companies in developed countries are beginning to manufacture and market new, more advanced products.

Involvement of the international aspect in the theory of life cycle products predetermines the lengthening of the product life cycle, quite unambiguously explains the foreign trade in technologically complex products. And yet there is no iron law obliging each product to go through all stages of the life cycle. The hypothesis merely asserts that when and if research and development is no longer a decisive factor in comparative advantage, production will move to countries with a comparative advantage in other cost elements, such as unskilled labor.

Alternative theories of international trade

The Heckscher-Ohlin (H – O) theory successfully explains many of the patterns observed in international trade. Countries do export mainly products, the production costs of which are dominated by their relatively surplus resources. However, not all phenomena fit into the scheme proposed by the X – O theory. Changes in the competitive position of some countries are inconsistent with available data on shifts in factor endowments. Statistics show that the structure of the supply of production resources for the production resources is gradually leveling off. And this may mean that the X – O theory, based on taking into account intercountry differences in the relative provision of production factors, is steadily becoming obsolete. In addition, the center of gravity in international trade is gradually shifting towards mutual trade of "similar" countries in "similar" goods, and not at all products of completely different industrial sectors.

The problems that have arisen as a result of the contradiction of the empirical data of the X – O theory can be resolved by either developing it or replacing it. The explanatory power of the X – O theory can be enhanced by a more scrupulous consideration of all kinds of factors of production. It is also proposed to replace the X – O theory with the theory, according to which the basis foreign trade is the gain from specialization in industries characterized by economies of scale.

Product life cycle theory

The theory developed by R. Vernon establishes a link between the life cycle of a product and international trade. Similar ideas were expressed by C. Kindelberg and L. Wells. Product life cycle theory mirrored the reality of the 1960s, when products designed for the American market and consumed in the United States began to gradually spread to other developed countries.

R. Vernon drew attention to the fact that the achieved mass production of any product will activate international trade. This sequence of events was considered on the example of the strategies of North American corporations entering the markets of Western Europe during its post-war reconstruction. Such economic expansion was carried out by increasing the volume of exports of certain goods.

R. Vernon substantiated the inevitability of changes in the company's strategies as the product passes through the stages of its life cycle. For this purpose, he noted the directions of alternative strategies and showed the principles of choosing the most appropriate one.

Corporations typically focus on three alternative strategies:

• produce goods in your country;
• export it;
• transfer production to other countries.

Choice best option depends on the dynamics of production costs and income, corresponding to a particular stage of the life cycle of the product. R. Vernon identifies three stages of the life cycle:

• innovation (implementation);
• maturity;
• mass production.

At the first stage, innovative companies master the national market. They can enjoy a temporary monopoly in these markets during the introduction of a new product. This allows them to offset some of the costs of investing in R&D and marketing. In the second and third stages of the life cycle, companies are faced with the emergence of competitors. The desire to avoid competition pushes firms to search for new sales markets.

At the stage of mass production, companies are actively looking for profitable places to locate production in other countries, especially large ones. If there is such a market, capital moves into it. In this case, the firm retains its leadership in business. In a new market, a firm can achieve lower production costs through the use of cheaper labor and raw materials, as a result, it acquires a competitive advantage that will allow it to push back competitors in the domestic market. Having achieved a reduction in the cost of production in new markets, the company begins to re-export the same product to the domestic market, but for more low prices, inaccessible to competitors.

Porter's Competitive Advantage Concept

The essence of Porter's theory

The theory is outlined in the work Michael Porter(born 1947) "Competitive Advantages of Countries" (in Russian translation the book was published under the title "International Competition") and contains an alternative approach to the analysis of the development of international trade. The author substantiates the conclusion that in modern conditions most of the world's commodity flows are associated not with natural, but with the acquired advantages formed in the competitive struggle. M. Porter concludes about the importance of clusters in international competition: "Clusters are geographically concentrated groups of interconnected companies, specialized suppliers, service providers, firms in related industries, as well as organizations related to their activities in certain areas, competing, but Providing the basis for extraordinary competitive success in certain areas of business, clusters are a pronounced feature of any national, regional and even metropolitan economy. Especially in countries with the most developed economies. "

Based on the assumption that it is not countries but firms that compete in the world market, M. Porter shows how a firm creates and maintains a competitive advantage and what is the role of the state in this process.

The competitive advantage that allows a firm to succeed in the global market depends on the right strategy and on the balance of factors of these competitive advantages.

Choice by the firm competitive strategy is determined by the action of two factors:

• the market structure of the industry in which the firm operates. Competition in the industry is determined by the number of firms and the possibility of new competitors emerging, the availability of substitute goods, the positions of raw material suppliers and product consumers;
• the position of the firm in the industry, which is determined by competitive advantage. The strength of this position is provided either by a lower cost level than competitors, or by product differentiation.

M. Porter comes to the conclusion that for successful promotion to the world market it is necessary to combine a correctly chosen competitive strategy with the country's competitive advantages. Porter identifies four determinants of a country's competitive advantage:

• provision with production factors, and in modern conditions knowledge, highly qualified labor force, infrastructure are of particular importance;
• the volume of domestic demand for the industry's products, allowing the use of economies of scale;
• the presence in the country of competitive industries - suppliers of resources and related industries that produce complementary products. This will contribute to the formation of clusters of national competitive industries;
• national characteristics of the strategy, structure and rivalry of firms.

The set of four determinants is called the diamond of Porter's competitiveness. Porter concludes that countries will succeed in industries where all four determinants of competitive advantage are most beneficial. A large role in this process belongs to the state, which affects the level of development of factors of production, contributes to an increase in domestic demand and the formation of clusters. According to Porter's theory, competition is an evolving process based on innovation and constantly updated technology.