Mairead Campbell
To what extent do you think it is possible for all UK manufacturers to be able to compete in a global economy?
Businesses often use SWOT analysis as a means of judging their strengths and opportunities against their weaknesses and threats. They can evaluate and decide whether they are competitive enough for larger companies or other companies in their industry.
I think it is possible for all UK manufacturers to be able to compete in a global economy as the UK focus on quality not quantity. They pride their produce on the ‘Made in Britain’ trademark and concentrate on high value low volume whereas other countries focus on the high volume approach which gives the UK a competitive advantage over quality which would allow them to increase their sales, hence increase their profits and competitiveness. For example, Lee Ann Fashions are producing a floral print for Marks and Spencer’s manufacturers clothing range ‘Best of British’
IP Protection is s strength in which the UK helps protect the ideas and processes of businesses by following the Copyright Patents and Designs Act which ensures these ideas are kept safe. This would encourage businesses to manufacture in the UK because in emerging economies such as China IP Protection levels are low which was experienced by Dyson who’s bladeless fan has been the subject of 100 infringements across 20 countries all originating from copies produced in China. The copies are costing the company £10m a year in legal costs, and profits were suspected to be double of what they were £40m if it wasn’t for the copies. Therefore the enforcement of laws on IP theft in the UK means a competitive advantage over those in emerging markets as they are more at risk.
The UK is a more attractive place for manufacturers because even though labour costs in emerging markets are lower than that of the UK, they have rose 22% in China who has also introduced a minimum wage and Vietnam and Thailand plan to follow suit. The costs of suppliers and transport have also increased significantly which Pot Noodle has experienced while transporting a container of noodles from Guangdong to Leeds costs £3,000. As well as that delivery times are also a disadvantage to China as Pot Noodle were left waiting seven to eight weeks for a shipment to arrive. This makes the UK a more attractive place because suppliers can be closer to their customers and can deliver much quicker. It also cuts out the large transport costs which would allow the firm to decrease their selling price which would help to increase sales hence increase profits and competitiveness with global companies.
The UK has a position of the world’s leaders in green technology; this enables them to compete globally with other businesses in other countries because as the issue of global warming is becoming predominant the UK can be seen to be taking actions against it making it a more appealing country to manufacture in. The government provide incentives for those companies who invest in greener technology for example Nissan who have created the Nissan Leaf invested £420million and received £20.7million grant from the government and up to £220million from the European Investment Bank. Nissan sold 2,507 Leafs in March, bringing its three-month total to 5,184 which was a 12-percent increase over the 2,236 sold in March 2013. Although the progress is slow the demand for electric cars are increasing as 9,000 electric cars were sold in March, against about 6,900 in February, an increase of almost one-third.
On the other hand, energy costs and pension costs make the UK less competitive globally because they are extremely expensive with the UK’s energy costs being the most expensive of the Western World. Environmental taxes are €6M/Wh, less than €1M/Wh in Germany and nothing in the US Gulf. For businesses such as Ineos a petro chemical company if they were to depend on the UK their survival could be short-lived because these costs would mean they see larger