Identify a major disadvantage of the product life-cycle theory.

What will be an ideal response?

Answer: This argument that new products are developed and introduced in the United States seems ethnocentric and dated. Although the theory may be useful in explaining the pattern of international trade during the period of American global dominance, its relevance in the modern world seems more limited. Many new products are now first introduced in Japan or South Korea. Moreover, with the increased globalization and integration of the world economy, an increasing number of new products are now introduced simultaneously in the United States and many European and Asian nations. This may be accompanied by globally dispersed production, with particular components of a new product being produced in those locations around the globe where the mis of factor costs and skills is most favorable.