In the past, consumers have been enjoying several products that were made in the USA. These products were appealing, reliable, and could last for a long time. Over the years, consumers around the world have been pursuing these products and patronizing them. Moreover, these products are also imported in several countries. However, times have changed. Businesses today look for more efficient and more cost-effective ways to grow their businesses and maximize their profits. In effect, these companies have turned to outsourcing their manufacturing capabilities, and have turned to foreign factories for the cheap. In addition, some companies have not just relied on foreign manufacturers but have either shared or ultimately sold their businesses to foreign owners for a profit. To further explain, here are examples of such companies that have done as such.
One company that started in the US is Element. The skateboarding brand started in 1992, which was just a small company in California, then grew over the next twenty years into being one of the biggest names in skateboarding today. The company grew in the sense that it started from just making skateboards, then ventured into also making their own apparel. With the expansion and the increase in the demand for their products, the company opted to outsource their manufacturing to China.
Another company is a toy manufacturing company that started in 1945. This company is one of popular toy makers, Mattel Inc. Started in California, Mattel has given the world iconic toys such as GI Joe, Barbie Hot Wheels, and Matchbox. These products that have been household a household name since it started, until today. Surprisingly, Mattel Incorporated toys are now produced in China with its last American factory closed in 2002. Today, about 70% of Mattel’s products are sent to China to cut on costs.
One more American based company that has looked to foreign investors is IBM. In the world of computers, IBM was once the leader in the industry. The company was a powerhouse in manufacturing and marketing computer hardware and software. The brand name was almost a staple in every office, library, university, or household. Today, the company doesn’t even make personal computers anymore. In 2004, the company sold part of its business which was manufacturing personal computers to the Chinese technology company Lenovo for 1.75 billion dollars.
In the world of jeans, Levis has been a frontrunner and global leader. The company is headquartered in San Francisco since 1853 where it has been manufacturing denim jeans. The company started as a business focused on manufacturing jeans for the people of western America. However, during the 1970’s to the 1980’s the world was sent into a “blue jeans craze” which was a significant growth in the brand. This has solidified the company name as an American staple. Sadly, the company that popularized “blue jeans” has sadly manufactured its last original Levis jeans in 2003 when the company closed its last U.S. factory in San Antonio which ended a 150-year era of jeans made in the USA. It has also turned to outsourcing the company’s manufacturing to different factories in Latin America, Haiti, and Asia.
Through all of the examples above, it may be seen that outsourcing is something that is a trend in the world of business. Building up a brand then cutting costs by manufacturing their brand to a company with low labor cost is something most American brands do. However, this might not be the case in other countries. One of these countries is Japan. The Japanese patronize their own products and refuse to outsource their products, especially to China. In fact, Japanese businesses have even dropped “Made in China” labels in their products in efforts to boost sales. Also, there has been a history of bad blood between the two nations, like the most recent issue where Japanese executive Toshio Motoya has produced Nanking denial books. There is such history between two nations that such business ventures is not that much popular.
Nevertheless, in the world of business, profit is the name of the game. And the thing most cherished by these businesses are its customers or consumers. In outsourcing, the company’s image may take a hit, but the huge cut in their manufacturing costs may overcome it. It all comes down to how the company markets its products and still be able to make the sale.