Over
the course of the quarter we have seen U.S. companies offshore to other
countries, other countries offshore to the U.S., as well as strategies states used
to attract foreign investment. Phew, so much information! Now it is time to put
everything together in terms of where offshoring is headed for the future. A
little clue given earlier was that offshoring is no longer restricted to the
U.S. approaching developing nations. Some countries are approaching America
because companies are beginning to search beyond just costs (Ellis). While
costs are crucial to a business remaining lucrative, there are other very
important incentives that will automatically cover the cost portion such as
global exposure in order to gain investors.
Another
important future trend I see is the popularity of producing within the United
States. In addition to avoiding the negative stigma offshoring carries,
producing internally is popularizing. While it is more expensive to produce in
America, costs are lowering and a greater number of people are willing to pay
more knowing that the good was made in the U.S. Additionally, I notice a
growing trend in goods being more wholesome. What I mean is that consumers are
looking for humane companies that do not test on animals for example, or choose
to find more natural foods whose ingredients are easily recognizable, as well
as making sure that goods are benefitting the U.S. people, which generally
occurs from buying goods manufactured internally.
I
very well could be wrong about all these predictions, but when I observe
people’s daily habits in conjunction with the negativity that offshoring
receives, it is plausible.
Offshoring
has also had a delayed effect on consumers as whole, but the trends did not
catch on until much later when people were expecting their goods to remain
intact or functional. Quality
assurance has for the most part been the first thing to go for the sake of
cost. Let me ask you, is it worth purchasing 10 cheap shirts that have all
ripped apart or 2 more expensive shirts that have remained in tact for over
five years? These are the kinds of questions consumers are asking! Having had
numerous complaints, refunds, and poor reviews, companies are looking to bring
their brand back home due to insufficient quality An example of such a move is
Sleek Audio, a provider of high end headphones. This company worked with China
for quite some time for the sake of reducing costs. Unfortunately there were so
many quality issues that the CEO and his son had to make numerous trips just to
alleviate these problems (Koerner 2011). They ended up spending more while on
striving to save money. It completely defeats itself!
I
understand that this is just one example and there are probably more companies
offshoring than not, however according to a survey distributed between 2010 and
2011 by MFG.com, 19% of participating businesses disclosed that they moved some
or all of their company back home (Koerner 2011).
Lastly,
since China is an offshoring hotspot, we are seeing rising trends in China’s
wages gradually. Wages are still drastically cheaper than wages in the states,
however the numbers are steadily growing, so the justification of cheaper labor
may not hold up in a few years.
In
sum, offshoring has its ups and downs, but at the end of the day, it lies in
the hands of the consumers. While businessmen can cut costs and produce
cheaper, if they hold up, consumers will keep buying that company’s goods. If
quality suffers as a result of offshoring, consumers’ willingness to buy
decreases. I cannot fully say one party wins or loses, but what I can assure is
that there are some serious changes happening in the living standard of the
American people, so keep your eyes out for what happens in regards to
offshoring!
Works Cited
No comments:
Post a Comment