What impact does globalisation have on operations strategy?

Globalisation significantly influences operations strategy by driving competition, innovation, cost efficiency, and market expansion.

Globalisation, the process by which businesses or other organisations develop international influence or start operating on an international scale, has a profound impact on operations strategy. This is the plan that outlines how a company will use its resources to meet its objectives. Globalisation affects this strategy in several ways.

Firstly, globalisation increases competition. As businesses expand into new markets, they face competition not only from local companies but also from international ones. This necessitates a shift in operations strategy to ensure the business remains competitive. This could involve improving product quality, reducing costs, or increasing efficiency.

Secondly, globalisation drives innovation. As companies are exposed to new ideas, technologies, and ways of doing business, they are often forced to innovate to stay ahead. This could involve adopting new technologies, developing new products, or changing business processes. This need for innovation should be reflected in the operations strategy.

Thirdly, globalisation can lead to cost efficiency. By operating in multiple locations, companies can take advantage of lower costs in different regions. For example, they might choose to manufacture products in countries where labour costs are lower. This can help to reduce overall costs and increase profitability, which should be a key consideration in the operations strategy.

Lastly, globalisation allows for market expansion. By operating in multiple countries, businesses can reach a larger customer base. This can lead to increased sales and profitability. However, expanding into new markets also presents challenges, such as understanding local customs and regulations. Therefore, the operations strategy must be flexible enough to adapt to these new environments.

In conclusion, globalisation has a significant impact on operations strategy. It drives competition, innovation, cost efficiency, and market expansion, all of which must be considered when developing an operations strategy.