Here’s something fun to try at home with your family:

Over the next twenty-four hours, pick up some objects in and around your home and turn them over to see where they were made. Many of them will say they were “made in China.”

No surprise there, so why bother doing it?

Here’s a reason: You might learn something–about yourself, about China (especially if you’ve never been there), and about American businesses and some of the challenges they’re facing.

China is an emerging market economy, and “Chinese companies are, of course, aspiring to become global players,” says Salkat Chaudhuri, who is Assistant Professor of Management at Wharton.

A good example is Lenovo–the world’s 4th largest PC maker. If you read the business pages you’ll know this, but you might not if business isn’t your thing: Lenovo bought IBM’s PC business a few years ago.

One way of explaining why Lenovo purchased IBM’s PC arm has to do with the Smiley Curve we talked about a few weeks ago. The dimples of the Smiley Curve are where the lion’s share of the value is–the brand and the retail sales. In between the dimples is where China normally comes in, but in more and more cases, China gets one or two dimples, too.

Chaudhuri explains it this way:

“…beyond quick access to markets like the U.S. and Europe and so forth, they need high-end technologies and also established brands. Those are the elements that the Chinese firms have been missing. And so it fits very well to combine the strong and cost-efficient back end of Chinese firms with the branding, market access and technology that Western developed firms can offer them.”

If you own an IBM PC, not only was it likely made in China, but the profits from the sale that are attributed to the brand–i.e. you probably bought it because you knew the name IBM, rather than Lenovo–went to the parent company in China.

There are a few things to learn as you’re looking at the items you pick up in your home (you might have to infer the answers and insights):

  1. What would someone need to know about me and my needs in order to make this object?
  2. Do I know anything about the corollary needs of the person in China who made this object?
  3. How much did this object cost the Chinese manufacturer to make?
  4. How much did I buy it for?
  5. Is the brand name American-owned, or is it Chinese-owned?

It’s a good idea to know something about the object you’re cutting with, brushing your teeth with, playing with, and so on. And companies in the U.S. need to understand the answers to these questions if they are to better compete in the global marketplace.

We’d like to hear from you, so please take a brief survey after you’ve examined a few things at your house.

Leave a comment and tell us which item you found was “made in China” that surprised you the most.

© John Dila 2009

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