Module Seven

            Comparative advantage is having the ability to produce an item at a much lower cost than anyone else.  The country/region that have well educated workforce, laborers with strong work ethics, lower taxes and offer incentives to potential customers are the most successful.  It is not just about the cheap labor anymore.  It is more about the quality and price.  The consumer is demanding a higher quality product for a much lower cost.  In order for a country/region to be able to provide this, it needs to take a close look at its way of conducting business.  According to Friedman, the country/region, its people and government need to engage in brutally honest introspection.  They need to determine to what extent they are taking advantage of the flat world in order to become more competitive. 

Successful businesses need to engage not only in wholesale reform but retail reform.  Friedman states that a country needs to focus on four basic things to develop, which are having the right infrastructure such as cheap internet, mobile phones, airports and roads.  The right educational system to get their people innovating and collaborating.  The right governance – a quality bureaucracy to channel, govern, and enhance the creative energies of a country.  The right environment – preserving the green spaces to attract the knowledge workers.  They need to adopt more market-friendly macroeconomic policies according to Friedman.  A country also needs to address retail reform as well.  The country needs to make it simple for a company to conduct business in order for them to be competitive in a flat world. 

Self-directed consumers, according to Friedman, are those that serve themselves in their own way, at their own pace, in their own time, according to their own tastes.  Consumers have learned that they can now control how they purchase items, from whom they purchase those items and the cost of those items.  The consumer has essentially now become the employee of the company they are seeking to purchase an item from and is paying that company for their products.  Businesses are having to change the way they do business in that they need to act like a small business and let the consumer believe that their product is being tailored from their needs and giving the consumer more options.  The consumer is now looking for the one-stop shopping experience.  They are looking for web sites that offer more than just one services. 

Being in control of how you are purchasing an item and at what price is a very addictive feeling.  The empowerment that you feel is very gratifying.  I have not fully grasp the idea of the self-directed consumer as of yet.  I am slow on the take-off, but I am getting there.  I have learned that I can have my bank pay my bills for me when I tell them to and I don’t have to worry about them.  This is an amazing discovery for me being a single mom who doesn’t have time to sit and write out checks for all the bills that I need to pay.  I love to sit down at my computer enter the bill to be paid and what date it is to be paid on  and leave it up to the bank to take care of sending it off.  The advancements in customer care and/or customer control are fantastic and give the consumer a feeling that they are in control of some aspect of their lives.

As globalization continues to grow, the perception that globalization is Americanization will diminish.  There are currently American made or produced items across the world such as McDonalds in Japan or being able to buy Coca-Cola products in many areas of the world.  This could lead to the misconception that globalization is Americanization.  I agree with Friedman in that there will come a day where the influence of other countries will be just as strong world-wide as America.  America had the advantage in that we were able to get a quick start, but as the other countries continue to develop and embrace globalization their cultures, songs, opinions, etc. will be known world-wide.