BIZTIPS - January 15, 2006

Biz Tips: Beyond China - Lessons on Competition
Sunday,January 15, 2006
By Art Hill

Allen Alley is CEO of Pixelworks and incoming President of the Oregon Business Council. Last Monday he told a story that got a hushed silence, then cheers and applause from over 1,000 business and government leaders at the fourth annual leadership summit in Portland.

His story? A few weeks ago, a Hong Kong businessman slouched into the seat next to Alley for the long flight from China to Portland. The businessman was upset about foreign competition -- from a company in Ohio. It seems that both the Chinese and American companies manufacture similar products, but the ones from Ohio are less expensive and higher quality. Why? Because the Ohio company has more advanced equipment and far fewer but more highly skilled employees.

By itself, Alley's story is a bold lesson for those who despair that America has been crippled in its ability to compete in the global economy. The convention center crowd was thrilled to hear about the competitive advantage of an American company with access to capital and a skilled workforce. We came away with a renewed sense of commitment to build on our strengths.

But on the drive home from Portland, I heard a second story that so echoed Alley's that I couldn't believe I was hearing it on the same day. National Public Radio aired a report on a 92-employee Massachusetts company, Riverdale Mills. Jim Knott, the 76 year old founder told the NPR reporter about his success inventing and manufacturing the plastic-coated wire mesh used in lobster traps.

The report went on to say you'd think wire mesh is a product that the Chinese are great at manufacturing and selling well below the cost of a similar American product. Not so. On a tour of his 400,000 square foot factory, Knott pointed to the sophisticated machines that form, fuse, and coat the wire. He noted that a similar plant in China has over 2,000 workers, and can't match his quality. Riverdale Mills sells over $21 million annually, and the markets for the company's products keep growing.

An NPR commentator pointed out that successful U.S. companies are focused on making high quality products that can't be overtaken by cheap foreign labor, and theyíre innovating continuously. Riverdale has added high-strength security fencing to its product line, along with gear for the growing fish farming industry.

So whether you compete with a Chinese company or the latest "big box" retailer in your area, consider these lessons in competition. Expand your access to capital for quality facilities and equipment, hire and train the best employees, and commit yourself and your team to the highest quality products and services. It's fast becoming the American way -- and perhaps the ONLY way -- to thrive in our global economy.


Content © 2006 East Oregonian