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BLOGFrom Shanghai to Washington: the world is flat

by Randall CraigFiled in: Blog, Business Development, Global Business

During the summer I spent an intensive 18 days in China. I was struck by so many things: the friendliness of the people I met, their incredible work ethic, and the vibrancy of the many Chinese cultures that I found.

And as many other world travelers know, China is a wonderful place to buy just about anything, really cheaply. In fact, I purchased three sets of ingenious roller blades that snap on to the back of your sneakers – for less than $2 each.

Fast forward to today: I am writing this entry from a hotel room in Washington DC, having just returned from the local mall. Walking around, I saw a boutique selling – you guessed it – the very same roller blades I purchased in China. The only difference, beyond the language of the packaging, was the price: $50 each.

Another example: I picked up a bag of potato chips for a snack the week before, this time in Toronto. The chips were made and packaged… in China. But the brand name was the local one I had been buying for years.

What’s the insight, beyond the obvious issue that things are “cheaper” in China?

It isn’t just information, or financial markets, or call centers that have no borders (and can be outsourced), but it is manufacturing and distribution as well. Both of these companies – the roller blades and the potato chip maker – fundamentally changed their supply chain linkages to remain competitive. And they had to retool – or change – their people to work in this new “flat” world.

Remember the poor quality (and very inexpensive) Japanese products of the early-mid 1970’s? Now think about Toyota’s impressive movement into the ranks of the biggest (and best) carmakers. Tsunami is a Japanese word, but it applies equally today to China: just wait.

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