Globalisation doesn’t just bring manufacturers more opportunities. It brings threats too. Competitors now include overseas companies operating in more favourable economic environments where labour costs and energy prices are lower, legal/social requirements less onerous and Government subsidies higher.
Unable to compete on a like for like basis with such threats, UK manufacturers are falling into the commodity trap at the same time as experiencing cost-down pressure from their largest customers. So how are manufacturers, large and small, to respond? What options do you have? Or should you just throw in the towel, move all your manufacturing jobs overseas and give up the fight?
The secret to winning any competition lies not in playing to your competitor’s strengths, but playing to your own and the smartest players of all find a way to change the game completely.
For manufacturing businesses, this translates into finding a new way to compete or a new way to deliver value that competitors can’t imitate quite so easily. Servitisation (service innovation) is the game changer. To understand why, it helps to rethink manufacturing.