The product life cycle: STAGE 3: Maturity
STAGE 3: MATURITY
In Stage 3, maturity, worldwide demand begins to level off, although it may be growing in some countries and declining in others. In the mature stage of production there is often a shakeout of producers so that product models become highly standardized, making cost a more important competitive
weapon. Longer production runs become possible for foreign plants, which
in turn reduce per unit cost. The lower per unit cost enables sales to increase
more in LDCs. ~~
Since markets and technologies are widespread, the innovating country J, no longer has a production advantage. In fact, there are incentives to begin J ^
moving plants to LDCs where unskilled but inexpensive labor can be used effectively on standardized (capital-intensive) work processes.
In Stage 3, maturity, worldwide demand begins to level off, although it may be growing in some countries and declining in others. In the mature stage of production there is often a shakeout of producers so that product models become highly standardized, making cost a more important competitive
weapon. Longer production runs become possible for foreign plants, which
in turn reduce per unit cost. The lower per unit cost enables sales to increase
more in LDCs. ~~
Since markets and technologies are widespread, the innovating country J, no longer has a production advantage. In fact, there are incentives to begin J ^
moving plants to LDCs where unskilled but inexpensive labor can be used effectively on standardized (capital-intensive) work processes.
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