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http://faculty.philau.edu/l911/deal.ht
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2015

Lucia Incerti




[GLOBALISATION AND
MANUFACTURING IN THE UK]
AQA A2 Business Studies Research Bullet 2

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Theme 2 - Globalisation



OVERVIEW
Key Issues

Globalisation and offshoring - the two are closely linked; one has caused the other
Changing nature of international competitiveness ­ which countries now have the
advantage ­ and why?
Globalisation is changing the way manufacturing is managed (multi-locations) and
organised (complex supply chains)…

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Theme 2 - Globalisation

- Whose own firms now threaten manufacturers in developed economies
- E.g. Lenovo, Haier and Huawei
Chinese firms have acquired/ developed expertise and are no longer content to stay at the
bottom of the manufacturing value chain
Businesses outside China face intensive competition inside and outside…

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Theme 2 - Globalisation

Supply chains are becoming much more complex
A great example of GKN which has manufacturing and distribution operations around the
world

Digitisation

The globalisation of manufacturing has been helped by widespread digitisation
"Digitisation enables collaboration across the boundaries of geography and has changed
the whole business…

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Theme 2 - Globalisation

The globalisation of production make managing complex supply chains more of a
challenge
The UK languishes down the league table as an exporter of manufactured goods
The decline of UK manufacturing in the face of global competition means the UK
persistently imports more goods than it…

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Theme 2 - Globalisation

Natural gas accounts for only 2% of average US manufacturing costs and electricity
represents just 1%
In most other major goods exporting countries the figures are 5-8% and 2-5% respectively

Examples

FDI into UK
- Over 2,000 UK firms acquired by overseas companies in the last…

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Theme 2 - Globalisation

Tata paid £1bn in the deal to merge with Tata (Indian company)
Tata committed to following an existing five year plan to invest in and develop the car
manufacturing business
Jaguar and Land Rover require hundreds of millions in investment over the next few years
Ford…

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Theme 2 - Globalisation

This has led to outsourcing and offshoring but the UK has seen an increase in re=shoring of
manufacturing back to the UK

JCB - 2013

Has been transformed from a one-factory operation with a turnover of £43 million to a
global business with 22 plants around…

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Theme 2 - Globalisation

When a developed country is threatened with cheaper imports invading the domestic
markets, it will respond by restricting the import of certain goods
Other developed countries attempt to work around quotas by opening production plants
in nearby developing countries, and then exporting the product directly from…

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Theme 2 - Globalisation

A consequence of large firms that dominate the textile industry is that individuals and
small firms are unable to compete
Garment production and some traditional textiles are the only places where small
businesses are still seen
Large factories present the greatest challenge to the handloom industries…

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