LECT 10 POL201 Dec 6th, 2010
Costs come from:
- Creating the garment
- The design is by the Gap (input)
- Cost involved with marketing, ads, sales
- Most of the money is in advertising, thats where there is value added.
- Unique combination of high value design
- Mega Retailer have quick response programs that decrease risks and increase
- Lean retailing: supplies sent frequently and then by looking at what is mostly bought, they ask
for shipment of pants when they want.
o Made possible by dev of several devices and technologies that help them track their
Manufacturing does not involve Gap, so when they need the factories they call
them, and the workers in the factories are hired, when there is nothing todo
they are laid off
Manufacturing in Developing Countries
- Global Value chains are more prevalent in developing countries
- Parts of manufacturing are moved around the world for production because they are cheaper
- Does produce forward and backward linkages
- These production systems offer opportunities for developing countries to integrate in the global
economy by enabling them to upgrade their technological industries
1980s- Coffee Banana (MVA 21%)
Mid 1990- Textile and Shoe Manufacturing (MVA 24%)
2000- Electronic Goods (semi conductors, medical equipment, autoparts, etc) (MVA29%)
Value is added after the production, in the design and advertising parts
- Design and Ad and retail happens in the US
- Computer Source happens in Brazil
- Production happens in Bangladesh
Moving up the global value change means that now the first step is done Bangladesh, then Thailand,
Singapore, Mexico, and then USA instead of opposite.
Produce development. Neo liberalism- once you get in on a global value change, even if you are on the
bottom, you are in, and then you can move up.