Module 3 pgs. 136-199

Module 3 Pgs. 139-199.

When a company moves its employees or manufacturing to a different location as to avoid taxes or lower costs is offshoring.  This is different from outsourcing.  Outsourcing is when a company moves only a part of its activities away from the rest of the company to lower costs.  Friedman’s book gave us multiple examples of outsourcing like moving taxes to india. The whole tax company didn’t move to India, just the “grunt-work”.  The examples Friedman gave of offshoring were entire companies relocating to China because of cheap labor and low taxes.  Especially when China joined the Word Trade Organization (WTO) in 2001.  That attracted more foreign companies to ship their companies to China, because the WTO made business fair for all companies.  Offshoring saves companies from dying off, but there is always a catch.  People will always lose their job, but another person will always gain one.  

A supply chain is the process of producing and distributing sale items.  Walmart is a pro at supply chains because Wal-Mart doesn’t actually make any of the products they sell.  The products come from different companies that sell to Walmart.  Walmart buys from the cheapest and most efficient companies to keep their sale items low in cost.  They are looking for companies that can make and ship their commodities at the lowest price.  Competition between companies is fierce, every company wants to be part of Wal-Mart to make some more profit. Wal-Mart can be very picky about who they partner up with.  They expect low prices so every company is competing to get the lowest price, the best value, and the cheapest means to deliver to walmart distribution centers.  After all, customers always look for bargain prices.  

The walmart strategy is to keep good tabs on where their supplies are and what supplies are needed and where. For example, if a Walmart in Florida isn’t selling many cookbooks, and another Walmart in New York is selling cookbooks like mad, instead of shipping more cookbooks to Florida, they will reroute those cookbooks to New York where the demand is high.  That way there is no surplus of cookbooks sitting on the shelves and there will be no need to put a discount on them just to get them out of the store. Walmart saves money and the cookbooks don’t go to waste.  All of that is possible with the help of technology. Every time a customer’s item is scanned into their system the system sends a message to the supplier telling them how many more products to make.  The supplier then makes that amount and ships them to Walmart where the process is repeated.  Besides Walmart, another company that keeps track of what customers like to buy is Google.

Google is interested in you.  Where you go on the internet, what you look up, Google knows.  The information you look up gets stored at Google.  Google then uses that information to tailor ads to your needs or at least to the topics you search for.  And other companies are adopting that same strategy as well.  So instead of giving you random advertisements, they give you ads that you are actually interested in.  That makes a lot of sense because consumers decide what to buy and not to buy. They are more likely to buy something that they are already interested in. It’s like a cycle where the customer keeps buying what they want and the advertisers keep giving them what they want. It’s a win-win situation for everyone.  Another great thing about Google is that it gives the same information to everyone.  There is no favoritism.  It doesn’t matter if you or me or anybody else is researching some subject, if we all search the same subject, we will all find the same information.