Flat World
Business
What is Optimize Cost to Fuel Growth?
AOL is targeting Chinese speakers in the United States by using Chinese language content developed by China's #2 media company in a cost-effective manner. For the China market, GE Medical Systems redesigned one of its product lines offering 80% of functionality at 50% of the US price. GE now leads the China market in these products and is also selling them to price-sensitive clinics in the US.
Today, competition is global. Companies from various geographies and industries are competing for the same customer dollars. However, reacting to competitors leveraging developing countries is merely a short-term fix. Opportunistically "offshoring" selected functions will have only a limited impact on their cost structure.
In essence, companies should shift their operational priority:
'Cost as Fuel for Growth' is about building cost-efficient operations. Businesses need to restructure their cost base. Building cost-efficient operations is not about being cheap. It is about using automation, technology and global operations to create a superior business model that makes you the lowest-cost producer.
'Cost as Fuel for Growth' is not about competing on price. Businesses can leverage it for pricing leadership in the market, or invest the saving to create better products and better customer experience, or to target new customers in the current market or develop products for new markets.
Businesses should employ talent where it offers best value, source where most cost-effective, and sell where most profitable. They should optimize operations globally. They should address new opportunities within existing markets (e.g. greater customization at lower cost, new market niches, better pricing analytics). Businesses should also evaluate emerging markets for generating additional revenue streams.
Companies mentioned here are not necessarily Infosys clients. These examples are taken from published journals 
illustrate the Flat World approach.
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Press releases
BT and Infosys Technologies Awarded National Outsourcing Association's Innovative Outsourcing Project of the Year
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Blogs
AMR Research wrote about Indian companies setting up numerous near-shore delivery centers in US time-zones. There you have it - India is outsourcing outsourcing. Discuss
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