The Product Life Cycle International Business Theory

GlaxoSmithKline is a global pharmaceutical company that started in 2001 as a merger product between GlaxoWellcome plc and SmithKline Beecham plc. The company was listed in the 2015 PWC top 100 company in terms of market capitalization ($112 billion). Currently, the company is present in more than 150 countries and has about 89 manufacturing locations and research centres in the UK, USA, Belgium, among other countries. Given the position of the company and current market dynamics, GlaxoSmithKline internationalisation process follows the product life cycle theory in explaining its current and possible foreign direct investment flows. This paper will analyse the product life cycle international business theory and how it applies to the company, three potential markets with potential entry modes, and recommendations on the ideal entry mode based on the product life cycle theory. International Business theory The selected internationalisation theory is the Product Life Cycle theory as proposed by Vernon (1966; 1971). This theory is selected because of its ability to help companies to use past events in their product performance to develop strategies. The product life cycle theory could be used to validate an internationalisation strategy as it reflects the market environment, customer behaviour and technological advancements. Accordingly, the product life cycle theory can be beneficial to GlaxoSmithKline’s internalisation strategy, particularly in anticipating new markets,Show MoreRelatedThe s Product Life Cycle Theory1520 Words   |  7 Pagesgrowing international links through FDI (IMF, 2003). Many developed countries decided to move their manufacturing to developing countries. There comes the problem which theory is better to explain manufacturing FDI from developed country firms to developing countries. 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