Industries such as coal mining, oil and gas, and steel are widely considered to be in the sunset stage of their lifecycle in advanced democracies, yet global demand and supply for these very industries continue to reach record highs. This disconnect between imposed decline in one part of the world and economics-driven growth in another reveals a fundamental gap in international business strategy theory. We argue that Vernon’s (1966) classic product lifecycle framework, and its subsequent extensions, cannot account for a world in which non-market stakeholders mandate sunset status for entire industries, irrespective of global market realities. This paper makes two contributions. First, we extend Vernon’s lifecycle theory to incorporate the phenomenon of mandated industry sunsetting, showing that the geography of supply and demand has re-emerged as a critical strategic variable, but now driven by non-market forces rather than economics-based considerations. Second, we develop a typology of MNE strategic responses based on two parameters: the ability to redeploy resources across industries and the ability to recombine firm-specific advantages with country-specific advantages in new geographies. Using illustrative cases from the mining equipment industry, we identify four strategic archetypes and demonstrate how firms from both sunset-mandated and growth-oriented countries are repositioning themselves. Our analysis carries significant implications for MNE managers navigating a world where political decisions override market signals, and for public policy makers who must recognize that sunset mandates may inadvertently strengthen foreign competitors while eroding domestic industrial ecosystems and national competitiveness.
Verbeke et al. (Wed,) studied this question.