What US tech companies can learn from China and India – May. 5, 2009

It’s a little funny to see an article like this. Just outsource everything… just focus on strategy and marketing. But look at what companies in the west are successful right now, in spite of the economic downturn. Apple comes to mind. Does Apple outsource everything? No – Apple controls and manages the entire customer experience. Assembly and production are outsourced to Foxconn, but Apple still keeps a close eye on the process to manage quality.

How to be profitable? Just need to be innovative. You need to create things that people are willing to pay you for.

Is there any evidence that suggests with a 1:1 exchange rate between the USD and CNY that the Chinese way of manufacturing would be competitive with the American one? Or more importantly, man-hour per man-hour does anyone believe that Chinese manufacturing can compete with manufacturing in Japan or Germany?

Schooled by China and India
What US tech companies can learn about innovation from abroad. Hint: it isn’t just about cheap labor.

NEW YORK (Fortune) — It would be a groundbreaking deal if consummated: According to press reports, telephone operator Sprint is in serious discussions with Telefon AB L.M. Ericsson to outsource management of its wireless network to the Swedish equipment maker. If finalized, the arrangement would make Sprint (S, Fortune 500) the first major U.S. wireless operator to cede total maintenance of its network to a third party consultant.

But in parts of Asia, outsourcing whole swaths of a tech business is old hat. India’s leading wireless operator, Bharti Airtel, for example, does little more than set strategy and handle marketing and sales of phones and service. Contractors, including Ericsson (ERIC) and IBM (IBM, Fortune 500), take care of running and upgrading the actual phone network, operating call centers and other day-to-day operations.

Global consultant John Hagel expects to see more U.S. companies plucking ideas from their international counterparts. Hagel, co-chairman of Deloitte Consulting’s Center for Edge Innovation, says Asian companies have started to implement some innovative management ideas that could resonate in the United States. And while many of these ideas on the surface seem like cost-cutting initiatives, Hagel says they also give tech companies flexibility and leverage, two things that benefit companies in good times and bad. “Chinese and Indian entrepreneurs understand that the only way to get scale is to be very modular in terms of how you define activities,” Hagel says.

[From What US tech companies can learn from China and India – May. 5, 2009 ]

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