China At The Crossroads – Jack Trout

Jack Trout is the originator of “positioning” and other important concepts in strategy and he has more than 40 years of experience in advertising and . Trout stated in his article that China should make products for itself instead of for someone else and China must consider taking what can be called the “branding highway.” From Forbes:

Built as a low-cost machine aimed at the OEM market, China is truly the world’s workshop. But the explosive growth has come at a high price. There are big environmental problems of factory pollution and energy shortages. There are quality control problems that are causing many customers to rethink China as a reliable supplier. There are “social responsibility” issues that have led the government to force entrepreneurs to pay higher wages. Managed growth and more controls are in the offing.

But here’s the difficulty. All these problems will only increase China’s manufacturing costs. That in turn will force manufacturers in China to shift production to lower cost areas in the country or move to places such as Vietnam. Since there is always someone out there that will do it for less, if you live by low cost alone, you will die by low cost….[Full Text]

[Image of Jack Trout via Forbes]

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