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Circuit City Gives Up

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Top message:  Good by Tmo Slave   Jan 16, 2009, 12:43 PM

Replying to:  Re: The American way - I want it for nothing, damn the consequences by beaner892000   Jan 17, 2009, 5:14 PM

Re: The American way - I want it for nothing, damn the consequences

by algorithmplus    Jan 17, 2009, 5:56 PM

You don't seem to pointing fingers at Disney for outsourcing jobs to India. Nor at JPMorgan Chase. Nor at Bank of America. Nor at Wells Fargo. Nor at Verizon, nor at Citigroup, nor at General Motors for building plants in Mexico or Canada that are cheaper to operate than in the United States.

It's nice to sit and use Wal-Mart as a whipping boy, but the truth of the matter is that American companies in all sectors that do not require face-to-face humans for customers service typically outsource manufacturing or back-office operations to foreign countries. From some areas of the business standpoint, if you can hire an Indian who is smarter, cheaper, and does a better job than his American counterpart, would you be willing to pay twice as much to hire an American who does a worse job?

It's the sad truth. Whether it's personal finances or corporate finances, we all pretty much try to get the best bang for our buck. Whether it's handset or datacard manufacturing, back office jobs in a corporate environment, or even telephone customer service, often it's outsourced to foreign entities. Many business may think they are choosing American to outsource to General Electric, who in turn has employees in foreign countries who do the work. I think you'd be hard pressed to find a company that doesn't have an outsourced service in a foreign country. AT&T? Yup. Verizon? You can bet on it. Banks? Absolutely.

No matter how much we sit and complain about these things, the truth is the global economic climate is changing. Sitting and complaining isn't going to do anything to help. We can make ourselves as individuals more marketable in the service sector since we know manufacturing jobs are leaving the country, yet we don't stress quality education like many countries do, and we are falling behind, making American workers less desirable compared to their foreign counterparts.

We as a country need to realize the world is changing, and like the concept of evolution, there are two options: adapt or die. We sit and complain instead of adapting, so that leaves one economic solution: die. It's the sad truth, and no amount of complaining is going to change that. We need to adapt to the changing global economy or risk losing a significant part of ours.

I'm willing to bet the ongoing recession is really going to hit the wireless companies much harder when it comes time to start deploying LTE (WiMax for Sprint/Clearwire), at a time when consumers are tightening their purse strings, the companies are hoping to get consumers used to paying a premium for new services. It's one thing to be willing to drop $60 per month for mobile internet, but as finances get tight, it's an unnecessary expenditure, and consumers will drop things like that. Consumers will cut back spending on ring tones. I know of colleagues that are nixing SMS plans and having the feature disabled.

I don't want to point fingers, but I think Sprint is going to have some troubles with that. As much as we complain about Sprint, they are innovative in price plans and introducing premium services. Think about some consumers who may have upgraded to Sprint's $99 unlimited everything plan. If you get service where you need it, it's a great deal compared to other carriers. But as rent goes up, overall gas prices go up, food prices go up, wages stay close to the same, even having hours cut with the same wage, being laid off; these things all have an effect. The $99 plan may now seem pricey and it may be worthwhile to scale back to a $60 plan, or even a $50 or $40 plan. Maybe you worked for Circuit City and had the $99 plan and you're going to be out work. The basic plans are suddenly financially attractive to you.

To be perfectly honest, it wouldn't surprise me to see Verizon, T-Mobile, and AT&T, namely, co-ordinate the upgrades of LTE coverage outside of their major revenue centres and become each others' biggest roaming partners (although AT&T and T-Mobile already are.) It's all too early to tell. A lot of the stuff in the economy in the business world is just investor panic. Just because you have a bad year, that doesn't mean you a terrible long-term business model, but as investors panic, it becomes hard to sustain your business model to weather the economic storm.

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