Strategy & Leadership

High-Tech, High-Touch: For Manufacturers, Globalization Puts the Onus on People and Service

Editor’s note: This is the last post in a three-part series covering five megatrends identified by the Advanced Services Group at the Aston Business School and Noventum Service Management in a recent study about how big societal, political, and environmental changes present new opportunities to manufacturers of all sizes. 

Megatrend #4: Globalization and the Need for Community

Many manufacturers compete today by operating on a global scale, a strategy that presents both opportunities and challenges. Globalization increases their scope to provide services to more markets, but they need to be able to balance customer needs and their advanced services capabilities, which will differ greatly in different geographies.

Our research respondents highlighted that their workforce and their workforce’s knowledge are key capabilities that enable them to meet this challenge and remain competitive on the world stage.

“Our competitive edge is our workforce, and within that workforce … the heritage and the experience and the knowledge of years, decades …of how to be a good engineer. I see globalization as the best possible spotlight to showcase our engineering talent and actually show the world what we’re capable of doing.” — Luke Benton, MNB Precision Ltd.

Participants in our research also highlighted globalization as a motivation to hire talent in other parts of the world in order to locate service capabilities closer to their customer. Airbus, for example, recently installed a final assembly line in Mobile, Ala., to be closer and more responsive to its North American customers. This is in addition to the 11 production plants, four engineering centers, five training centers, 10 materials and logistics centers and three other final assembly lines that it already has distributed around the world.

Megatrend #5: Income Inequality and Social Exclusion

Of course there are perceived downsides of globalization: communities and individuals who feel left behind by rapid change. Income inequality is rising in many countries and experts have suggested that large parts of the global population are effectively shut out of the market economy because they are too poor. Approximately four billion people are forced to live on less than $1 per day.

If companies ignore this market, they effectively miss out on half the world’s population as potential consumers. But serving these customers is not easy and offering existing products and services may not be appropriate here.

Some companies, such as Schneider Electric, recognize the need to respond to this challenge with unique offerings, and indeed this is a key part of their strategic plan. Schneider aims to support access to education in Africa by providing one of the key enablers: access to energy.

Building sustainable businesses in emerging economies requires a new and innovative approach, and respondents in our study recognized that serving this market would require a radical rethink to their firm’s products and services.

“When you are looking at emerging markets you’ve got to think about … how do you use the brand to grow a long-term, sustainable business? But you’ve got all kinds of issues … because, I mean, in my industry, investors want a three-year return, for example.” — Kevin Coleman, Alliantus

Read the full whitepaper on the five megatrends conducted by the Advanced Services Group and Noventum Service Management.

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