Which theory describes the life cycle of a product from introduction to decline in international markets?

The International Product Life Cycle is the correct choice because it specifically focuses on how products evolve through various stages in international markets. This theory was developed by economist Raymond Vernon and outlines four key stages: introduction, growth, maturity, and decline.

During the introduction stage, a new product is launched, often in the home market. As it gains acceptance, it moves to the growth stage, where demand typically increases, and international expansion may occur. After reaching maturity, sales growth stabilizes, leading to increased competition. Eventually, in the decline stage, demand decreases, often due to market saturation or the emergence of new technologies or products.

Understanding this cycle is crucial for businesses when planning their international strategies, as it helps in determining when to enter or exit a market and how to allocate resources effectively. The emphasis on the international aspect adds a layer of complexity, highlighting that products may have different life cycles in different markets.

In contrast, the other theories mentioned focus on different aspects of international trade and competition rather than the life cycle of a product specifically. For instance, National Competitive Advantage deals with how a nation can create conditions conducive to competitive industries, while Strategic Trade Theory focuses on the strategic aspects of international trade policies. Mercantilism is an older economic doctrine