How does product life cycle impact international trade? For product life cycle, it have four stages which are introduction, growth, maturity and decline. In international trade, that a new product involve in a new market will cause growth because the needs of the new market is unsatisfied. For example, the Starbucks Company in China, when the Starbucks coffee shop entered China, it becomes very famous and popular. The needs is still improve now. They get great profit in this large Asian market. It is keep growth in China. In American, as an innovation in 1971, Starbucks became the stages of maturity or decline because of the economic environment. Hard to say Starbucks is in an accurate stages because it may become a maturity in their home country or relative countries and may an innovation for another countries. I think this unbalance impact international trade. Think about it. A Starbucks coffee may sell 3 bucks for a normal ice coffee in American and may sell around 25 Yuan in China. It is around 4 dollars. Starbuck Company use profit to build more shops to appeal customer’s needs. However, the price is higher even if the row cost is low. It may use this profit to make up the decline of home country or transformation. What the Starbucks can do in the developing market is no more than a local New Coffee company, however it influence the growth of the new trades. The international trade made the cycle longer. In another way, the international trade change the style of the life cycle. An innovation product should be growth in the homeland, however, because of the low-cost countries such as China and Indian the company product and assemble device or products in those countries in the first. It will also impact the international trade.
It is argued that free trade is advantages to when government intervenes in international trade. Do you agree or