The Factors that have Led to a Decline of the UK Machine Tool Industry - Essay Example

?Answer 1a The factors that have led to a decline of the UK machine tool industry are: The General Decline in the Manufacturing Industry There was a general decline in the manufacturing industry and factories were not able to manufacture the raw materials due to the lack of resources which were limited and the technology was also limited. A Competitive Threat posed by Japan and Germany The manufacturing industry of Japan and Germany had flourished which increased their exports to other countries while the products of UK were not seemed to be better than them. Countries relied more on products of Japan and Germany which led to a decline in the machine tool industry of UK dramatically. A Lack of Graduate Engineers in Britain In Britain, more students were getting involved in management studies and very few started opting engineering. This resulted in lesser engineers with a graduate degree which further halted the manufacturing industry. Over-Diversification Resulting in Short Production Runs The diversification of products led to a decline as there were more products but lesser machinery. Therefore the need to meet the demand of all the products led to short production runs for different products which resulted in a shortage. This greatly affected the machine tool industry of UK. A General Lack of Automation and Computer Application UK’s machine tool industry lacked in technology compared to other countries. The manufacturing process took more time and was dependent on work to be done manually. This also meant that there was not much use of computer applications which usually enhance the work. A Vicious Circle of Decline Resulting in a Lack of Investment The whole economy of UK was in decline which meant that investors were not willing to invest in businesses or the manufacturing firms. This meant that the traditional means of businesses could not be modified for benefits. Poor Marketing The manufacturing firms were not able to market their products effectively which meant that the consumers were not attracted to the products. The ads which were used were part of mass marketing and no segments had been made. This limited the understanding of individuals or a group of consumers which made marketing much more difficult for the firms in terms of consumer attraction. Low-Volume Production at High Cost The firms produced lesser products and the cost that was associated was high. This resulted in the bankruptcy of the firms and they were not able to cope with the requirements of their manufacturing process. This further limited their efforts and thus resulted in a decline of machine tool industry. Answer 1b The factors resulted in a massive decline for the UK machine tool industry as the general decline meant that it was happening in the whole of Britain. This meant that there were very little chances for a particular industry to prosper. The threat from Japan and Germany meant that more investments were needed to compete as people were finding their products more convenient and reliable compared to UKs. The lack of graduate engineers meant that the existing technology could not be developed as much as when it could have been with more engineers. The over-diversification of products meant that time had to be given to the manufacturing of all different products which limited the time given to the manufacturing of a particular product. The lack of automation meant that more work was done manually which took time compared to work done using machines. The lacking of the use of computer applications also meant that the industries were not advancing with technology like the other nations. The decline in the economy resulted in the lack of investments, therefore, the companies had no quick more to modify and enhance their businesses. The poor marketing efforts did not attract consumers which increased imports as products of other countries were more attractive to local consumers. The production by these manufacturing firms was at high cost but in low quantity. This meant that industries had more expenses compared to their earnings which led them to loss in the long term. Answer 1c One of the most affecting factors was the general decline in the manufacturing industry as industries usually depend on each other for raw materials. If one is not doing well, it directly affects the other. Since there was a decline in all industries, even if one of them did well at some point, it had to go down at point due to the ineffectiveness of the other firm. The competitive threat of Japan and Germany was also decisive as consumers were favoring their products and ignored the local products as they provided little satisfaction compared to imported products. The lack of graduate engineers meant that the future was unconvincing as lesser engineers would be employed in the manufacturing firms which will further add to the woes. The lack of automation was also a big problem as firms had to hire more workers and pay them wages. This also took more time for the manufacturing of the product compared to the time taken by machines. The lack of investment was, however, the biggest problem as money was not available to improve the manufacturing processes and also to help the entrepreneurs to take risks in order to maximize profits. The over-diversification problem is not as big as the other problems because this can always be improved if investments are attracted. Poor marketing of the products was a major problem as products did not build their image as what the consumer’s requirements are. This is why consumers favored products from Japan and Germany. The low-volume production was also a big problem this led to shortage of product in the market. Since the costs were huge, the firms were usually left with no cash at disposal. Answer 1d Industry Extinction - Strengths Extension of an industry of the same type will reduce competition within the nation. The imported machine tools can help industries to make their own machines by learning. Weaknesses The lack of investment means that the industry has no cash at disposal to buy new equipments to enhance product specifications or even to make immediate decisions. This leads the firm to bankruptcy. State Intervention - Strengths The development of state-of-the-arts tools in Computer-Aided Design (CAD) and manufacture and flexible manufacturing systems meant that technology was being improved which would help in doing the work faster. Also the flexibility meant that decisions could be made according to the situation rather than being bounded by the company’s strategic rules. The attempts to encourage mergers among smaller manufacturers was important to make sure that work could be done more effectively and brainstorming is done to utilize the firms inputs into outputs. Weaknesses The state intervention could lead to nationalism which could erase competition within the industries. This could limit creativity of people working in the organization. If there was control on imports by the governments, it could be disastrous as other countries would retaliate. It would also affect the exports as the British industry depends on it despite that fact that its market share is in decline. The Japanese machine tool firms which were operating from either British bases or other European bases could also take advantage of the import controls by British government and manufacture at greater pace. Rationalization – Strengths This could lead to some kind of product standardization as the product could be improved to attract more customers. The production runs could be longer which meant that there would be no shortage in the market and will enable the manufacturing firm compete with the market demand. The cost of manufacturing could be reduced with industries merging as raw materials could be bought and processes in the nearest firm to that resource. Weaknesses As the UK market was in a rapid decline, the rationalization of the industries could be only for the short-run survival and the consequences later could be worse. Foreign Investment - Strengths This was an attractive offering to the highly specialized firms which had attractive niches in the market as investment meant that the company had more liquid assets to run the business. It also motivates is the exploitation of monopoly power such a brand names and technology. Weaknesses Foreign Investment meant that local businesses will get privatized and the control of the government on these manufacturing firms was limited to the policy for all firms. The government could not have control with the firm’s internal affairs and how it operated as long as it worked within the legal policies. Licensing - Strengths The success of Japanese machine tool industry backed by a large manufacturing base could be beneficial as British firms could manufacture products designed by Japanese firms. This will help in the innovation of the product and will boost the economy of UK. Weaknesses Licensing can also preclude innovation as firms of other countries do not allow their confidential information of the product to be leaked to other countries. They do this to maintain their competitive advantage over others. Answer 2 To achieve my goal of becoming the Chief Executive Officer, I would take the following steps: Identify the problem in the relevant industry and make a list of my strengths, weaknesses, opportunities and threats accordingly. Try to convert my weaknesses into opportunities by managing the steps of marketing my product effectively. Gathering information about the place where my firm will be operating and identifying who my competitors are. Setting up my goals and the objectives to be achieved in the estimated time span so that work can be done considering the deadline. Making sure that all my machines are in proper working condition to make sure that it gives me maximum outputs by processing minimum resources. The labor to be hired will be well trained and skilled according to the job description. The investment will be done using funds from banks as personal investments will result in higher amount of interest to be paid. For documented work, making essential use of computer technology to save time and to spend less on office employees who are bound to do documentation manually. Analyzing the actions frequently to make sure that all work is done smoothly and also making necessary changes wherever required to make to organization more flexible. Ask for feedbacks from employees and stakeholders to improve work wherever necessary. Answer 3 The new product to replace petroleum in the near future will be Bio fuel. The necessary steps would be: Bio fuel manufacturing requires mainly three steps: Filtering in which food particles are removed from waste vegetable oil, removing of water in the residual gangue to speed up the reaction and titration to determine the quantity of lye which is required. The idea is a perfect replacement as it will be made of food which is a renewable resource. It will be tested on cars to make sure that it is efficient an efficient fuel before it is launched. The target market initially will be the elite class as it will be a little more expensive compared to petroleum. Posters will be set up on petrol pumps so that people learn the need of Bio fuel when they are actually there to fulfill their need of petroleum. The business will need heavy investments to manufacture the product on huge amount as it will be a worldwide need. The product will be manufactured at industries built near farms so what it is easily transferred to the factory. At first, to test the product, we will give samples for free so that consumers learn more about the product. The product will be commercialized once people understand the need of the product. Bibliography How to make Bio Fuels; 2010; http://biofuel.org.uk/how-to-make-biofuels.html Foreign Investment; David E. Upton; 2010; http://www.referenceforbusiness.com/encyclopedia/For-Gol/Foreign-Investment.html Exporting Africa: Technology, Trade and Industrialization; Samuel M. Wangwe; 1995; http://unu.edu/unupress/unupbooks/uu34ee/uu34ee0b.htm Achieve your Dreams; Susan M. Heathfield; http://humanresources.about.com/od/strategicplanning1/a/goal_setting.htm Read More