ced by the same industry. Intra industry trade accounts for approximately 40 per cent of world trade(Mahoney, Trig, Griffin, Pustay, 1998). Linder believed that international trade of manufactured goods occurred between countries at the same stage of economic development that shared the same consumer preferences.Therefore the country similarity theory consists of the value that most trade in manufactured goods should be between nations with similar per capita income, and that intra industry trade in manufactured goods should be common (Mahoney, Trig, Griffin, Pustay, 1998). International Product Life Cycle Theory (IPLC)The International product life cycle theory is a valuable instrument in analysing the effects of product evolution on the global scale. The IPLC generally applies to established companies in industrialised countries who expand their product range. The theory is broken up into five major areas; Release: As competition in Industrialised countries tends to be fierce, ‘Manufactures are therefore forced to search constantly for better ways to satisfy their customer needs.’ (Ball et al, 1999). The core elements in new product design are gained from customer feedback from previous models. Once the product enters the domestic market and begins to create a positive reputation, the demand increases and hence we come to an end of the first stage of the IPLC.Exports: As the product receives positive customer response, the international demand for the product begins. The manufacturer begins exporting to increase its market share. An example of this was the personal computer (PC) craze of the early 80’s. In 1985 55,000 PCs were sold in the United States, by 1984 the industry had experienced a 136-fold increase to 7 million PCs (Richter-Buttery, 1998)Foreign Production begins: As demand increases with the new global market, it becomes economically feasible to begin local production in various nations. By sharing tec...
