Many would say this is an impossible goal since the U. S. lost its top ranking to Germany in 1992, and China replaced Germany as the top exporter in 2009.\u00a0 I say it\u2019s possible if American companies get back to what made them great in the first place \u2013 unique, innovative products made to high quality standards by a well-trained workforce.<\/p>\n
For nearly 60 years, American manufacturing dominated the globe.\u00a0 The United States led the world in innovation.\u00a0 American companies like Ford, Boeing, Maytag, IBM, and Levi became household names.\u00a0 American manufacturing became synonymous with quality and ingenuity.<\/p>\n
Of these companies, Maytag was bought by Whirlpool, IBM sold off its PC business to Chinese company Lenovo, and Levis are now made in China just like every other brand of jeans manufactured.<\/p>\n
When I drive around with my granddaughter, we play a game to see who can see the most \u201cslug bugs\u201d (VW Beatles).\u00a0 They are easy to spot, even in oncoming traffic, because they have such a distinctive look compared to other cars.\u00a0 Nearly every other car looks like peas in a pod \u2013 you can\u2019t tell what automaker they are until you see the logo.<\/p>\n
The unique appearance and features of a VW Beatle are examples of what those of us in marketing and sales call Differential Competitive Advantage (DCA).\u00a0\u00a0 Other examples of DCA thrusts are:\u00a0 wide selection, customization, convenience, speed of service or product delivery, innovative cutting edge technology, fills a wide range of needs or a special need, specialized know-how, and lowest price.<\/p>\n
There are no marketing rules that apply to every type of company, and there are no quick fixes or \u201cmagic pills\u201d that will work for every company.\u00a0 There is no such thing as a sustainable competitive advantage \u2013 it will change over time.\u00a0 However, the universal law of marketing is \u201cWhat\u2019s in it For Me (WIFM) so that the DCA of your product has to answer that question.<\/p>\n
To be successful at exporting, American companies need to have an innovative product that fills a market need in other countries.\u00a0 They need to know their potential markets, know each possible way to reach that market with a persuasive message and use marketing methods that produce the maximum leverage with minimum effort.<\/p>\n
For years now, I\u2019ve been hearing that American companies had to outsource manufacturing offshore to remain competitive.\u00a0 To me, this means that these companies gave up on marketing their products using their differential competitive advantage (DCA) and were down to competing on the price level.<\/p>\n
German companies don\u2019t compete on price; they compete on the perceived benefits of their reputation for high quality, precision-engineered products.\u00a0 Germany\u2019s average manufacturing wage is higher than the United States, the highest of all the European Union countries.\u00a0 They have strong unions that offer more benefits and vacation time than any American companies or unions.\u00a0 Germany was able to keep its position as the top exporting country for 17 years belying the argument of American companies that high union wages drove them to offshore manufacturing to be competitive.\u00a0\u00a0 It\u2019s even less of an argument in my territory because only a handful of companies are unionized.<\/p>\n
I believe that there is also an intangible factor in Germany\u2019s success in exporting \u2013 the pride company owners have in their country and their products.\u00a0 German company owners want to be successful as German companies, not global companies.\u00a0 My research revealed that the majority of German companies are privately owned, not publicly traded.\u00a0 This gives them the leeway of following their own measure of success instead of being responsible to their stockholders for the next quarter\u2019s earnings.<\/p>\n
Too many American based companies refer to themselves as global companies instead of American companies.\u00a0 These companies are \u201cglobalist international companies\u201d because they no longer have loyalty to the United States.\u00a0 Their loyalty is to their bottom line, their stockholders, and their future bonuses, and they will do whatever it takes to make their bottom line look good even if it causes harm to themselves and their country in the long run.<\/p>\n
American companies need to get back to producing their products in America.\u00a0 If the majority of the components, parts, and assemblies in a product are being made offshore, is it really an American product?\u00a0\u00a0 Will companies who source offshore be able to produce their products if their overseas supply chain was disrupted to the point that they couldn\u2019t get parts?<\/p>\n
Do companies who outsource really understand the Total Cost of Ownership (TCO) of comparing the cost of sourcing parts and assemblies domestically rather than offshore?\u00a0 Do they recognize the hidden costs of doing business offshore?\u00a0 If not, the Reshoring Initiative<\/a> of the National Tooling and Machining Association (NTMA) can provide a useful worksheet to calculate TCO.<\/p>\n There is no question that outsourcing offshore will continue for the foreseeable future, especially for the multinational companies that have products to sell within the countries in which they set up manufacturing operations.\u00a0 Manufacturing products locally for consumption within a foreign country will be crucial to profitability as transportation costs continue to increase.<\/p>\n American manufacturers must be willing to continuously invest in their products to improve performance quality, and cost, but they must also be willing to improve the skills of their workers to be more competitive in the global market. Germany and Switzerland lead the world in their apprenticeship and workforce training.\u00a0 Apprenticeship programs have virtually disappeared from American industry, and we must rebuild them to follow the example of Germany and Switzerland to train the skilled workforce needed for the 21st<\/sup> Century in the United States.<\/p>\n