Raymond Vernon's product life-cycle theory was based on the observation that for most of the twentieth century a very large proportion of the world's new products were developed by the firms situated in Germany and sold first in the German market.

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Explanation:

Raymond Vernon developed the Product Life Cycle Theory in response to the Heckscher-Ohlin model and confronted it directly. Vernon's theory states that a product's life cycle starts in the area which it was invented and it will gradually move towards other regions of the world.

Vernon was an American and he developed his theory by studying a large number of new products developed and sold in the US. His model included 5 stages:

Introduction Growth Maturity Saturation Decline