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Never-Ending Buyer's Market
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Never-Ending Buyer's Market
Sam Ghandchi
http://ghandchi.com/47-Producing.htm
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Nowadays, the world market is a buyers' market and not a sellers' market. This
reality has a lot of ramifications for the staffing of the business enterprises.
Was the world market always a buyer's market? My answer is no.
In the Industrial Age, the world market was mostly *not* a buyer's market. The
market was essentially a seller's market, except during the economic crisis of
overproduction. Why?
From the beginning of Industrial Revolution till the end of 1960s, the distance
from concept to product was a long way. In other words, a firm which innovated a
new product, would milk any new innovation to its fullest, before competitors
would have something comparable to bring to the market.
Thus the market was always the seller's market, except for periods of crisis of
overproduction, such as the 1930s. The economy of Information Age is different.
The distance between concept and product is very short. No matter how
innovative, any innovation is available from a competitor in a short span of
time. Thus no innovator can enjoy a monopoly on a new product. The success of
COMPAQ in reverse engineering the IBM PC is a good example of this reality.
Therefore, in today's economy, the most sophisticated producers have to work like
McDonald's, which always has its competitors, such as Burger King, and Wendy's present
next door. Therefore a buyer's market is no longer
limited to the periods of crisis of overproduction and is on-going.
The global market is now always a buyer's market and in such an environment, it
is not enough to produce according to customer's requirements. Companies need to
respond by producing for customer's potential requirements and this is what
companies try to achieve by adhering to total quality management, zero defect,
and other similar ideas.
When a product is in the market, if it is not what the customer needs at that
moment, the product will fail. Features, quality, and price are all evaluated by
sophisticated customers, who have many choices always available to them. The
tightest regulations will not help and the business will go to companies that
understand the market reality of our times.
The customers no longer buy by loyalty, etc. Customers only care about value and
this is why all the nationalistic advertisings have not helped any of the U.S.
automakers in face of the successes of Toyota, Honda, and other Japanese
automakers in the U.S. domestic market.
Protectionism is actually suicide for any country in today’s global economy of
post-industrial information society, because it will only delay the failure by
turning it into catastrophe.
The old inefficient companies lose to other firms, whether the competitor is a
local startup or a company half way the other side of the world. For these
companies to succeed, they need to reengineer their processes to deliver
superior products more efficiently.
The above means that they need to use quality processes and hire the best
workforce. This is why old boys’ network hiring fails. The truth is that
companies need to hire ones who can perform the best. In other words, to bring
the talents from wherever the right talent is available.
Some of the best hardware engineering talents are now available in Taiwan.
Similarly excellent software engineering talent is now available in India. So
that is where the hiring managers go and look for potential employees.
Even if there were old boy fraternity regulations and protectionism in place
within the national boundaries, the business enterprises would still lose to
foreign competitors in the global market.
The above is no longer limited to US corporations and no matter where in the
world one is producing, one needs to know that the global market is now always a
buyer's market and any business enterprise and any country needs to plan for
this new reality.
Hoping for a democratic and secular futurist republic in Iran,
http://www.ghandchi.com/index2.html
March 14, 1998
*The above article was first published in
the ayandehnegar magazine Issue#2 in the first quarter of 1998.
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