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28.1.06

Staying competitive—and staying alive 

The Japan Times has an article on how companies can stay in a world, reporting on a symposium at which ’s Suzanne Berger spoke. The lessons are pretty clear, and have been saying this for decades: in the countries, and contract manufacture to .
   But the incentive for innovating, even in the first world, seems to have disappeared for many. Many companies rehash older products and put the word ‘Classic’ on it—from toy cars to watches.
   That is where the first world falls into trouble: without innovation, their cease to mean the same things to the next generation. They become outmoded and passé.
   They also open themselves up to from the poorer countries as they increase their and , and to challenge them.
   Yet there are so many first-world countries and companies resting on their laurels today. Why? Follow the money: save on innovation, move production to a cheaper nation, and increase and .
   This is such a short-term fix that the company does well for a few quarters before it gets into massive trouble—or ceases to exist altogether. Yet, the quarterly focus of most investors and the collective short memories of the work against the long term.
   But are not , for the most part. They are swayed by the —and the brand must have products that appeal. And if they do not, then it does not matter where is, or how much profit per unit can be generated.
    is an example, at least in Europe, where the cars are being but have the appeal of refrigerators on wheels. Whereas , as The Japan Times highlights, developed its in the , used components, and outsourced to a company that does assembly behind the . Each company did what it was best at.
   Only if we turned out enough , rather than kids studying tourism.
   Takashi Kitazume’s article notes:

Berger emphasized that the only winning in dealing with is to —to create unique in the company that are difficult to replace. …
   [Prof Berger warned,] ‘If your strategy is competition with others chasing after the , there really is no way of winning, because there will always be others who are willing to go the further mile’ into more remote areas of the world.
   Japanese companies—perhaps because of their past experience in which outsourcing to Taiwanese and South Korean[s] eventually created powerful competitors for them—are cautious and maybe too concerned, whereas American firms are so aggressive in outsourcing their own capabilities that they may find it difficult to retain their innovative capabilities, she observed.


   By way of a footnote, it may be fair to put western for American above, and is certainly guilty of losing much of its capacities, the government failing to invest in and education. The warnings were there in 1999, and the country now faces a crisis as its Finance Minister engineers a recession. I only wonder: for whom? Certainly not the people.
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Note

Entries from 2006 to the end of 2009 were done on the Blogger service. As of January 1, 2010, this blog has shifted to a Wordpress installation, with the latest posts here.
   With Blogger ceasing to support FTP publishing on May 1, I have decided to turn these older pages in to an archive, so you will no longer be able to enter comments. However, you can comment on entries posted after January 1, 2010.


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