Strategies in an era of global competition

Abstract

The Australian government welcomed globalisation and led the way with tariff reductions, claiming that many local manufacturers were inefficient and inward looking as a result of over protection. This paper reports on a series of interviews conducted in companies belonging to the (small) electrical appliances and household kitchenware industries, which both face fierce competition from imported goods. The objectives were to find out what business and manufacturing strategies have sustained them in the new trade environment. Six distinct strategies were identified, although a mix is common. There has been a real push to increase productivity, but it is not enough on its own to enable a firm to defend its domestic market against cheap imports. The main impact of globalisation has been a move to replace local sources of production with others located offshore. Typically, these are independent suppliers in China operating under contract manufacturing agreements.