Thin Air: How Wireless Technology Supports Lean ... - Prepaid MVNO

Why Now? Lean Wireless and the Costs of Doing Business • 39
Tort costs are rising in some European countries, and the United States
has passed tort reforms to limit liabilities.
China’s structural costs have risen considerably in the last three years
(that $.20 used to be $.13), chiefly due to new pollution control costs, but
China still enjoys a considerable advantage. This upper hand has helped
them to surpass Canada as the largest supplier of imported goods to the
United States ($321 billion versus $313 billion from Canada in 2007);
and since 2000, China’s share of total U.S. imports has doubled (from
8.2 percent to 16.5 percent).
The short story is that the world is, in essence, “going American,” which
is helping the United States. But the playing field isn’t yet level, and that
17.6 percent disadvantage is costing the United States in competitiveness.
United States companies cannot be productive or profitable enough.
A More Inclusive Picture—Variable Costs
If $.48 is the RCI in the United States, then a U.S. company should profit
$.52 for every dollar spent, but of course there are far more costs of doing
business than those structural costs. A short list includes:
• Inventory
• Labor
• IT infrastructure
• Governance, risk, and compliance (GRC)
• Production (in-house or outsourced)
• Brick-and-mortar offices (own or lease)
• A Web presence
• Sales and marketing
• Transportation
• Human resource management (in-house or outsourced)
• Logistics
• Raw materials and services
• Security
With all those costs, most companies will have very little of that $.52 left
over (if any). However, although these costs are unavoidable, companies