“Global Marketplace” in a nutshell - This is a highly competitive and volatile world. Open, vigorous trade between virtually all nations has led to market-based approaches to most contemporary challenges.
U.S. firms have established and maintain intense collaboration with companies across the world. The private sector has taken the lead in addressing the pressing issues of the day. Any attempt by governments to get involved in regulating business is seen as unnecessary intrusion. Citizens trust markets and they are more than willing to allow them to ‘work the magic.’ So far, their patience and confidence in the market forces has paid off. Case in point is the now routine hassle-free immigration across most nations and the dramatic increase in global food production.
Traditional powerhouses such as Japan, Germany and the United States no longer control the capabilities and resources needed to manufacture highly specialized, high-value products. Although developing countries are not at par with the advanced nations yet, they have found niches and are investing heavily in developing their industrial competencies. To exploit their comparative advantages, countries are specializing in producing what they do best and rely on other countries – halfway across the world in some cases – for everything else they need. The interconnectedness and speed of this global market has a very clear downside as well: increased volatility. For example, a labor strike in South Korea can have huge ripple effects in a Madison, WI manufacturing plant. As a result, firms are taking extensive precautions to keep the flow of goods both smooth and secure.
Affordable and seamless supply chains are encouraging companies to invest in global manufacturing capabilities with most large firms using a mix of off-shore and near-shore plants to remain low-cost and flexible. The cost of moving goods anywhere in the world is very reasonable, primarily due to new and cheaper energy sources and technologies, and non-obtrusive environmental regulations. Energy costs, although relatively low, remain extremely volatile because of the continual natural and man-made supply disruptions of oil- based fuels.
Affordable and seamless supply chains are encouraging companies to invest in global manufacturing capabilities with most large firms using a mix of off-shore and near-shore plants to remain low-cost and flexible. The cost of moving goods anywhere in the world is very reasonable, primarily due to new and cheaper energy sources and technologies, and non-obtrusive environmental regulations. Energy costs, although relatively low, remain extremely volatile because of the continual natural and man-made supply disruptions of oil-based fuels.
Raw materials and commodities are brought to the market from all over the world, as there are minimal trade barriers limiting their availability. The free flow of goods is, however, driving extreme volatility in commodity prices, which is a persistent problem for most firms. Therefore, price – rather than access – is the key criterion for choosing a commodity item. Postponement of final product customization till the very end has led to higher value-density in products being moved within the United States. Retail sales are predominantly conducted online, even for grocery vendors. With a significant proportion of the U.S. population living in large and dense cities, individual delivery to residences is the norm in most retail transactions.
The collaboration between firms across national boundaries has further expanded the regional markets to the point that they have overlapped and blended into a single, global market, with a minimal set of regulations in place. It is said by cynics that, in this brave new world, “the only regulation is that there are no regulations”. Finally, a true global marketplace has emerged, where ideas, technology, labor and goods are exchanged freely and quickly.