Term Paper on "Commodity Pattern as it Relates to Offshores"

Term Paper 8 pages (2403 words) Sources: 4

[EXCERPT] . . . .

This arrangement of trade, led development has become mutual in labor-intensive markets, where consumer merchandises businesses such as garments, footwear, figurines, arts, and customer electronics form. Tiered networks of those third world contractors making complete goods for overseas buyers transmit out manufacture. Large marketers or retailers that order the merchandises supply the stipulations.

Businesses fitting into the buyer-driven model, firm like Sears Roebuck and Walmart, generally design and/market, however, do not make the merchandise they order. They are "producers without plants" that detach the physical manufacture of goods from the enterprise and marketing phases of the manufacturing process. Profits in buyer-driven chains originate not from gauge, capacity, and technological developments as in producer-driven chains, nonetheless relatively from exclusive combinations of high-value examination, enterprise, sales, advertising, and monetary services that permit the retailers, creators, and dealers to act as calculated brokers in connecting overseas workshops and traders with developing product positions in their chief consumer markets. Productivity is supreme in the comparatively focused segments of comprehensive commodity chains categorized by high barricades to the admission of new companies.

In producer-driven chains, industrialists making progressive products like airplanes, cars, and computers are the significant monetary agents not only in relations of their wages, but also in their capability to exercise control over retrograde linkages with raw material and constituent suppliers, and advancing linkages into circulation and transaction. The lead companies in producer-driven chains typically fit to worldwide oligopolies. Buyer-driven commodity chains, by difference, are categorized by extremely competitive and internationally regionalized factory systems with low barricades to entry in fabrication. The businesses that advance and sell brand-named merchandises exercise considerable control over how, when, and where industrial will take place, along with how much profit accumulates at each phase of the chain. Thus, while large manufacturers at the point of production control producer-driven product chains, marketers and merchandisers at the design exercise the main advantage in buyer-driven industries and retail ends of the chain.

The apparel industry is a perfect instance for investigating the subtleties of buyer-driven commodity chains. The qualified luxury of setting up clothing businesses, united with the commonness of developed country protection in this subdivision, has led to the supreme assortment of clothing exporters in the third world. Additionally, the forward and backward linkages from clothing production are widespread, and help to justify for the large quantity of jobs related with a prosperous apparel industry. As it pertains to Japan and South Korea, if one were to look at the clothing manufacturing in those two countries, the clothing appears high quality and cheaply priced.

The United States wants quality clothes for cheaper prices. Chinese made clothing and clothing made from traditional choices like Indonesia appear poor quality. If there is more investment in apparel made in and from Japan and Korea, there will be increased likelihood of high customer satisfaction since the clothes made in these two locations last longer than those not. Furthermore, the clothing manufactured in Korea and Japan are not necessarily in sweat shop conditions, removing some of the stigma often associated with clothing manufacture overseas.

Overseas investment means less focus on quality assurance and more focus on quantity since these two countries already produce quality clothing for affordable prices. It would make sense to include their manufacturing abilities in any investment plans because they also tend to include the latest trends and fashions in their clothing. Japanese and Korean clothing tends to entice customers with latest fashion trends and give loads of embellishment details young clientele crave when they dress. It makes for fewer efforts on quality control and more capital investment on advertising.

A famous Japanese clothing line in the United States, called Uniqlo, offers affordable, high quality clothing for winter and summer. They offer coats and sweaters that American consumers seem to enjoy at low prices. If American apparel companies buy clothing of this quality from Japanese markets, their profits may increase. The same can be said of certain clothing brands in Korea found in their online shopping center, G Market.

In conclusion, America seems to want to open up markets overseas in places with a high demand for clothing. American companies can also invest into the apparel industries of places like Japan and South Korea in order to gain an apparel market that manufactures well-constructed, quality, trendy clothes at affordable prices. These apparel brands are popular in their respective countries and can also be in America with American clothes traveling to these countries for the manufacturing process.

It would only make sense to delve into the overseas apparel business because it allows for further growth opportunities in the United States in terms of exposure to new clients and exposure to new sorts of clothes and styles. The apparel industry is growing and needs to reinvent itself. Why not do so overseas in international markets.

References

Buthe, Tim, and Helen V. Milner. 'Foreign Direct Investment and Institutional Diversity in Trade Agreements: Credibility, Commitment, and Economic Flows in the Developing World, 1971 -- 2007'. World Politics 66.01 (2013): 88-122. Web.

Chen, Dong et al. 'the Role of Sponsor and External Management on the Capital Structure of Asian-Pacific Reits: The Case of Australia, Japan, and Singapore'. SSRN Journal (2014): n. pag. Web. 7 Mar. 2015.

DuPont, Ann, and Jane Craig. 'The Sun Also Rises In The West - Emerging Alternatives To Pacific Rim Sourcing In The Western Hemisphere'. Proceedings of… READ MORE

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