Table of Contents
September 11th, 2001
The War in Iraq
Mad Cow Disease
Recent Events That Have Affected Businesses
Today’s business world is anything ever before experienced in history. Organizations now operate in an environmental with one primarily stable characteristic – change. Businesses today must now nimbly maneuver through an ever-changing obstacle course of challenges. It has become a world where those who can adapt well thrive, and those who can’t fall by the wayside. To add to this tumultuous atmosphere, recent world events have affected businesses and their relationships with government and society.
One of the most apparent events that have dramatically affected businesses is globalization on a scale never before seen in the business world. In prior generations, competition most often occurred from businesses that were located in a geographic area nearby. Many times they were in the same town, often they were in the same state, and for the most part they were at least located in the same country. These rules no longer apply.
Today, thanks to globalization, competition assails businesses from countries around the world. Technology has made borders and distances less and less relevant for businesses. Customers now have access to businesses from all four corners of the globe. They can compare prices from these international competitors, often times, with just a simple click of the mouse.
In addition, the information revolution has made long distance customer-business relationships a norm. Thanks to globalization, it is now the norm to never have met the person you are doing business with. Relationships are now commonly built over the phone or via e-mail. Although this has opened up entire new clientele and supplier possibilities for today’s businesses, it has also subjected businesses to competition from businesses they never before had to contend with.
The challenge with this scenario is that these businesses may be operating in completely different cost environments. Labor costs may be completely different for now competing businesses. Facilities costs too can be dramatically different. Even raw materials in different parts of the world can be so skewed that it becomes impossible to compete on a cost only level.
Although globalization has added a new dimension of challenge to today’s businesses, globalization has added new opportunities for increased efficiencies. Offshore outsourcing has been developed to take advantage of some of these cost saving advantages in other areas of the globe. From singular components to the entire product life cycle, businesses are outsourcing their products to companies on the other side of the globe in order to remain competitive, in today’s hyper-competitive world. Even in house services are being sent away for offshore outsourcing.