Posted: August 12th, 2013
Book report on “The World is Flat”
The World Is Flat: A Brief History of the Twenty-First Century by Thomas Friedman is an elaborate work, which provides the effects of globalization in the 21 century. The term “the world is flat” is used metaphorically and is used to indicate the dire need for level playing ground for global commerce and business. A level playing ground for commerce is essential in that it provides the competitors with similar market conditions for growth of commerce. Additionally, the term “the world is flat” is an indication of the increasing irrelevance of geographic and social boundaries in the world (Friedman, pp. 41).
Hence, organizations in the contemporary business setting are increasing their competitiveness and profitability using aspects such a technology and globalization to enhance their cause in achievement of global competitiveness. The author provides that he as an advocate for liberalization of markets to result in global free trade. He also provides criticism to states around the world resisting the changes in terms of global commerce and business. The book is based on individual research, individual reflections and conversations with the public.
Friedman provides that there are ten flatteners of the world which aid in making the business and commerce fair for all organizations in the world. The first flattener is collapse of The Berlin Wall in September 11 1989. The author describes in the book that, “When the walls came down, and the windows came up.” (Friedman, pp. 45). It symbolized the end of the cold war and gave way for people from either sides of the wall to engage in rebuilding the society and economies as well as engage in constructive commerce. In essence the fall of the Berlin war was an indication of the end of communism and paved way for technological changes such the increased use of personal computers for interactions and use in commerce. Technological advancements peaked during this period resulting in the introduction of new products such as Windows, personal computers, word processing, dial up modems and standards tools for communication such as global telephone communication system. Such have enhanced globalization through improved channels for communication.
The entry of Netscape into the field of technology was a main flattener in that the firm instigated the access of the internet to a larger part of the population. Netscape enhanced access to the internet from the previous restrictions, which only provided limited numbers of people with access to the internet. This is essential in that it played a significant role in the process of digitization. Products such as music, files, pictures and word documents could be easily accessed from the internet and manipulated by people in the various parts of the world. Hence, the internet has enabled interactions from a global perspective thus increasing commerce from a global perspective.
The development of Netscape and its entry into the digital market provided a precedent in terms of digital and other technological advancements around the world. It resulted in the development of the fourth flattener, which is workflow software. This is defined in the book as the interactions of machines without the involvement of human beings. This according to Friedman would provide the world with a new means of interaction through the creation of a new platform for collaboration. In addition, this would also lead to the fourth flattener, which is open sourcing. This is made possible by the presence of an elaborate platform for collaboration of the various online projects. Such include the present online platforms such as Wikipedia, online softwares and blogs. This according to Friedman is, “the most disruptive force of them all” (Friedman, pp. 53).
The fifth flattener is outsourcing which allowed modern day companies to delegate or split activities such as services and manufacturing. This is essential for companies in that they are able to achieve efficiency and costs effectiveness of costs reductions using such approaches.
The sixth flattener according to Friedman is offshoring, which the author defines as the ability of organizations to take advantages of incentives provided by other countries necessitating the relocation as a means for cost reduction. Entry of countries into the World Trade Organisation (WTO) has facilitated increased competition in an increasingly competitive world. This is because of the need by such countries to encourage trade in their respective territories with incentives such as lower taxes and operating costs. In addition, offshoring as provided in the book has allowed for the seventh flattener, which is described as supply chaining by Friedman.
Supply chaining has increased because of offshoring and collaboration. Supply chaining is widely used by multinational entities in that they focus on diversity of markets to increase profitability and reduce the potency for risks. He points out that successful companies such as Wal-Mart provides an elaborate example for attainment of competitive advantage through diversification, clear lines of supply and distribution of products and services to the customers. The eighth flattener is in-sourcing which entails the execution of services on behalf of other organizations. This enables other entities to reduce their costs of operation as well as increasing the revenues of the entity executing the services for another organisation.
The ninth flattener is in-forming, which is the increased ability of the society or people to find information with ease, which is aided and provided by the internet through the various search engines. The last flattener is what Friedman defines as “the Steroids” which comprises of the modern digital products such as cellular telephones, Personal Digital Assistants., Instant Messengers, iPods and voice Over Internet Protocols. From the ten identified flatteners, it is expressly evident technology has been a major driver towards the achievement of globalization and realization of “flattening” in Friedman’s words.
The “flattening” of the world has been an inevitable phenomenon in the modern society (Friedman, pp. 61). This is because of the technological advancements evidenced in the modern society through the presence numerous changes in the social interactions as well as in the world of commerce. In addition, it is also evident that commerce and technology have become mutually reliant on each other for relevance. Electronic commerce is evidently increasing in that it has assumed a great position in the society by enabling the society to achieve globalization.
Electronic commerce is defined as the sale and procurement of goods and services using information technology systems. Literature provides that there are three specific waves of electronic commerce. This include putting up market information on the world wide web, allowing online orders in terms of sales and purchases and construction of electronic means of exchanges for funds and provision of means for receipt of goods and services. Essentially technology and the related advancements are currently the largest used channels of communication. This is because of the numerous avenues for communication by the internet. This has been a driver of growth in that it has enabled business around the world to assume global expansion strategies as well as accrual of benefits such increased efficiencies and reduced costs of operation.
Modern day technology in comparison to traditional technology used in business is different in entirety. This is evidenced by the large-scale application of technology-based products in the execution of tasks in the contemporary organisation. Technology advancements have aided the development of new products, services and new approaches to satisfy the consumer needs and wants as well as providing consumers with profound experiences thus subsequently cultivating customer loyalty.
Technology and the internet are the highlights of modern day advancements. They enable simultaneous execution of numerous tasks delegated in an organisation. Hence, an organisation is able to use technology and related products for costs reductions in processes and activities in the organisation. Cost reduction is considered as one of the greatest challenges in the management of an organisation. This is because costs are usually brought about by either necessary or unnecessary processes or activities in the organisation. Technology has been a driver in terms of organizational practices assumed by contemporary organizations (Friedman, pp. 63).
Innovation and creativity are also strong points for any organization. This enables an organisation to achieve competitive advantage brought about by new products, services and new approaches in terms of execution of tasks in the organisation. Hence, majority of corporations around the world, if not all corporations around the world, have undertaken the incorporation of electronic commerce as a means of diversifying the market access.
The internet provides both individuals and corporations and the society with numerous economic opportunities in an era marked with declining employment and revenue opportunities for individuals and corporations respectively. It provides for intermediation and disintermediation, frictionless commerce and trade, competitive pricing strategies assumed by an organisation and personalized sales and marketing for the consumers. Disintermediation and intermediation arise from need to decrease and increase the value chain especially in respect to the sale or market for soft goods.
Disintermediation allows for the reduction of the value chain in specific instances such as the sale of soft goods such as music and files. Majority of this genre of products are sold via the internet. This is good for an economy in that it ensure the reduction in prices of commodities and resulting in subsequent increase in demand of the commodities. It essentially reduces the costs for the producers and the customers. Customer costs are reduced by their ability access goods and services form the comfort of their homes and offices. In addition, it reduces the costs of operation for the producers in that the line of distribution is shortened which also includes the reduction of possible intermediaries who increase costs of services and goods (Friedman, pp. 60).
The time for access of goods and services is reduced because of the elimination of intermediaries such as retailers and wholesalers. This is because the producer is involved in direct contact with the consumers. Direct channels of communication are paramount in such relationships between the consumer and the producer in that they provide the consumers with an avenue to air their complaints in terms of the ability of the products or services to provide satisfaction of needs and wants. On the other hand, re-intermediation is brought about in that; the connection with intermediaries such as brokers, wholesalers and retailers provides an organisation with access to a specific market segment. This is essential in that organizations are able to increase their diversity in terms of access o new markets and consumer segments. This provides organizations with the much-needed avenues for improving service delivery to the consumers in the market (Friedman, pp. 69).
Commercial opportunities in the internet are available to both organizations and individuals seeking to start enterprises. Frictionless commerce is usually attractive for both the customer and the organisation. This is because it provides mediums, which ensure minimal contact between the customer and the seller. Organizations could use the internet by using approaches, which would ensure that they are able to increase their profitability and levels of competitiveness.
Increasing skills and knowledge as it relates to functions in an organisation with respect to technological advancements is paramount in contemporary organizations. Organizations could ensure that they have access to highly qualified individuals with employee programs such as training and development of employees in preparation for the technological changes, which have been gradually changing market conditions and commerce in general. Traditional commerce has been embedded in friction, which arises from issues such as costs of finding partners, costs of gathering information about products and consumers and the costs of establishing customer trust and loyalty.
For achievement of frictionless commerce, there is paramount need for individuals in business as well as corporations to ensure they have adequate and perfect information about consumer needs, wants and their respective markets of operation. Organizations could ensure that they have adequate information about the pricing strategies and trends used in a given market. This allows for preparations by an organisation with the aim of ensuring that they maximize their revenues. Pricing strategies should be made with respect tom the demand and supply of goods and services issued by an organisation in its respective market of operation. Miscalculations about pricing of services and goods in a market would be a costly mistake for an organisation (Friedman, pp. 77).
Organizations and business people could also take advantage of the technological advancements and ensure their survival using personalized marketing approaches provided by an organisation. Personalized marketing is essential in the contemporary business settings as it provides the organisation with an avenue of attracting potentially loyal consumers of its products and services. Customer trust and loyalty is usually based on the satisfaction of the consumer needs and wants and the provision of the customer with a profound customer experience. Hence, an organisation should be able to invest in marketing approaches, which ensure attraction of new customers. In addition, this could be enhanced by research and development of new products and services in the market.
Research and development is paramount for organizations, which aim at achievement of their strategic goals and objectives. Research and development could entail research on new products, strategies, and markets’ viability. This provides the organisation with the much-needed precise information about issues, which relate to the achievement of its strategic goals and objectives. Organizational functions are usually driven by the need to increase profitability through understanding the consumer needs and wants. Understanding the consumer needs and wants is essential in that it provides the organisation with information such as the current and future consumer trends. Such information provides the organisation with information, which could be used in planning and budgeting to ensure the satisfaction of the consumer needs and wants (Friedman, pp. 89).
Conclusively customer focus could be achieved with use of technology systems. An organisation usually exists because of the presence of customer who are purchasers of the organization’s services and products. Additionally, organizations could ensure their presence in the internet and provide for electronic payments and the subsequent deliveries of products. such usually provides security to the consumer that he or she is able to get additional value for the services and products purchased from an organisation. Special focus on consumer needs and wants ensures that an organisation has perfect information about the consumer needs, wants and preferences; resulting in the development of goods and services which are sufficient for the consumers in their efforts of satisfaction of their needs and wants.
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