The international PLC

1. The international PLC When exporting a product it is vital that: • the company carefully considers what stage the product is in within the home country • the technology is available in the foreign country.

2. The international PLC Consider the burger giant McDonald’s. When they first entered the UK their style of service and production methods were very new here. The level of technology of the catering equipment was different. However, once suitable suppliers were located, this made it easier for competitors to enter the market.

3. International PLC theory This was developed by Vernon in 1966, who suggested companies exporting internationally are likely to experience the following: • New products will be developed and marketed in the domestic market first but eventually they will be exported on a small scale to another country. • The company will start producing the product in the foreign country either under a license agreement or as a joint venture. • Production abroad will become competitive and exporting from the foreign country will begin. • Production may now be relocated to developing countries from where the products are shipped back to the home country as well as to other markets.

4. The international PLC Points to note: • The time span for a product to pass through a particular stage in the PLC will vary from country to country. • Due to the economic situation within countries, a product can be at different stages of the PLC in different countries. • In the example in slide 2, McDonald’s decided to enter the new country (the UK) in the maturity stage of their home PLC.