Physical Location

Abstract

Vernon’s product cycle theory is reexamined and extended in the first half of this chapter. It did not originally address the recent environmental changes, the global economy, supply chain management, and the rise of developing countries. The geographic location of manufacturing facilities is discussed from the viewpoint of the innovations. The physical location at the beginning of the VCR industry is explained in the latter half of this chapter. Although there was a great global demand for the VCR from the beginning, Japanese companies exclusively manufactured almost all VCRs in Japan and exported them all over the world. Manufacturability is the critical factor at the beginning as Vernon’s product cycle theory demonstrated.