International-Business-Dr-R-Chandran-E-book

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International Business- Dr. R. Chandran
Though the demand is growing in few countries, especially in the less
developed ones it declines in all the developed and few developing
countries. Cost cutting is the only strategy available for the innovator to
sustain. Few of the companies shifted their focus to get products
manufactured wherever per unit cost is low. It is a general trend that
innovating countries no longer enjoy production advantage. Since many
physical, fiscal and infrastructural incentives are offered by the developing
countries, such innovators are lured and increase there production in
developing countries. Today, we see such manufacturing units in Indonesia,
Thailand, Malaysia and Brazil. India is also emerging as a strong production
centre for automobiles, health care and consumer products.
4. Declining stage
1. The main feature of the declining stage is that maximum production takes
place in less developed countries.
2. The innovating country starts importing from other countries.
3. The days of keeping high margins are over.
4. It is the stage of survival and no prosperity for the innovator.
5. The innovator may completely deviate from a specific product and go in
for a completely new product.
The industrial countries disappoint the innovator because the affluent
customer demands more and more. New products are flooded in the market
with so many features. Since cost factor is the only weapon, production from
less developed countries will win. The innovator of the product cannot
depend on the first production unit which gave the first product for
launching.
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