PRODUCING FOR A BUYERS' MARKET
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 buyers' market? My answer is no.
In the Industrial Age, the world market was mostly *not* a buyers' market. The market was essentially a sellers' 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 expression of this reality.
Therefore, in today's economy, the most sophisticated producer has to work like McDonald's, which always has its competitors, such as Burger King, Wendy's and Carl's Junior, present at its door. Therefore buyers' market is no longer limited to the periods of crisis of overproduction and is on-going.
The global market is now always a buyers' 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
Protectionism is actually suicide for any country in today’s
global economy of post-industrial
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 oldboys’ network hirings are failing. 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
Even if there were oldboy 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 buyers' market and any business enterprise and any country needs to plan for this new reality.
* The above article was first
published in the