Tendency of Organizations to Move from Manufacturing to Digital Formation

This essay discusses the reasons why organizations tend to move from simple manufacturing operations to digital formation investment over time. It also explores the factors that may slow or stop this process. The essay highlights the importance of analyzing market competitiveness and implementing digitalization effectively.

Global Business Sustainability
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Table of Contents
ABSTRACT.....................................................................................................................................3
INTRODUCTION...........................................................................................................................4
MAIN BODY...................................................................................................................................4
Essay on “there is a tendency for organisations to move from simple manufacturing
operations to digital formation investment over a period of time. Why is this often the case?
What might slow or stop the process”?.......................................................................................4
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10
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ABSTRACT
Over the years, manufacturing industry has not changed itself as they are only performing
one thing i.e. inputting raw materials in a machine and pulling out final goods. But, present
course of conducting business in today's dynamic environment has changed and impacted over
different elements. Also, digitalisation has changed the thinking process of both consumers and
sellers, which has raised issues for different companies while conducting operations. Since, it has
become vital for companies to not only focus on one approach, but to start performing and
grabbing opportunities at different levels. This essay consists of a proper reasoning of different
ethical goals of why manufacturing industry (different companies) should keep on grabbing
different better opportunities to perform well in the market. Basically, there are many
manufactures, that are dealing as wholesalers and retailers and serving customers products and
services offline only. But, due to shift of mindset of consumers towards online business sector
which helps them in buying and selling of different products while they are sitting at home,
therefore, it has become vital for these manufactures also to alter themselves and start conducting
business over online portal. Also, companies would first require to analyse situation of the
market and analyse the competitiveness before launching the new service in the market. Then
only, the process of digitalisation within the company can effectively be implemented right on
time.
Also, this essay will present information in relation to different approaches that will help
in better understanding the scenario of how low investment may lead manufacturers to gain
ample number of benefits as there will no mediator will take place and company could directly
start making connections with customers (direct). Away with this, essay is also going to be
enclosed with different issues that can take place when a manufacturer is looking forward to
expand their business through selling products and services to customers with the help of online
application and so on. Including this, models that will be utilised are: target products, analyses
cost/benefit structure, M&A/FDI/Collaboration and OEM or Outsourcing destinations. Including
this, essay will also consider digital internalisation process with B2B/C2C frame. Lastly,
consideration will take place of how these manufacturers could change themselves and lead to
start expanding their businesses at international or national level. Through this, it can be said that
companies would directly become able to gain ample number of opportunities in near future.
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INTRODUCTION
The connection among social, ecological and monetary factors found in small business
environments is global business sustainability. This can also be described as an organizational
policy for the use of environmental or green goods. Green goods are created without unhealthy
local ecosystems or by helping exterior world to expand (Dyllick and Muff, 2016). Only a
concerted use of all these variables will preserve stability by an entity. When businesses use
green goods internationally, sustainable development arises. This essay contains all the concepts
and structure that help businesses shift from the production unit to the virtual enterprise and
evaluate its effect on company in the long term. Specific hypotheses and systems can also
examine how to use firms ' capital effectively and achieve their goals.
MAIN BODY
Essay on “there is a tendency for organisations to move from simple manufacturing operations to
digital formation investment over a period of time. Why is this often the case? What might
slow or stop the process”?
When two nations share products and services, it is called international trade for mutually
beneficial. The main objective of these trades is to ensure that goods and services are routinely
delivered throughout the region. The query is now why national trade is required it is essential.
Nation trading has a range of explanations. It allows them to comply with their people ' demands.
A country that can not generate everything that its people eat because of a shortage of capital and
thus has to use other capital. These tools can be used explicitly so that goods are imported. Often
countries trade with others for mutual gain and cultural transfer in order to build a stable
relationship with each other. So overall common objective of nation trade is to fulfil the demand
of public by importing goods from other nations (Rezaee, 2016).
This trend to switch from production to digital investment training would certainly lead
the business to a competitive advantage, because the business would profit from the cost savings,
leading to an increase in consumer sales and income from the company. Business costs can be
reduced by switching to digital production, directly selling the goods to its clients, and receiving
mediator removal assistance. And eliminating intermediaries would minimize business costs and
act as a strategic advantage for the organization. The company's benefit is also that it has a sound
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and driven distribution platform in the business due to this phenomenon. In order to do
internationalisation of business activities, there is a process which is needed to be followed in a
sequence. Herein, this is important to know that what is internationalisation. It is a method of
talking about a new product designed for sale outside the constant market where the company
sells its goods, outside the borders of the nation. Internationalization is the mechanism in which
businesses perform their business processes to growing countries worldwide. The needs for
internationalization emerge when the company hits its peak in internal operations and now wants
to expand more for gain (Galea, 2017). There are different types of methods to do internalisation
such as:
Licensing- Licensing is the form of internalization of the business. It is used when a company
has relations with limited products or products which require permission to sell in a specific
country. Business requires a license for its service from the authorities of that specific country.
Franchising- When taking the license, businesses use the names of the other company. The
corporation uses the brand name without the privilege of franchise owner to buy patents. This
has been the most popular form of application because it needs less investment and has an impact
on company costs because it needs less money for business expansion in other markets.
Acquisition- This is the kind of approach used by big retail firms in various countries. Under this
a big company buys small company. It requires considerable investment in resources because the
acquisition of the product becomes more expensive but also it can use the value of the company
name and another company's patent and profit from the existing distribution system of the
acquired business.
Joint venture- Joint venture is common method for internationalizing businesses operating in
different nations by joining between two or more companies with mutual benefits. It requires the
sharing of information for joint activities between the two companies. The advantage of this
approach is that the organization will decide where it needs to operate (Chang, 2016).
Exporting- The internationalization process involves the exporting of company's goods. It is a
successful method of internationalization, as the company will bring its product into the new
market while accruing plant costs and provide the company with imported goods to operate its
established business.
So these are some common ways to expand a business at international level. When a
organization decides to invest its activities, then the best internationalisation strategy should be
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selected. What method it chooses is based upon business size and inclination, but if the firm is
inclined to change its activity and wishes to be a digitally-business forming organization, it has
to choose the exportation mechanism as the means by which it is internationalised, that is
because the organization has a speciality in the development of goods.
Way to gain and sustain competitive advantage- There are various types of comparative
advantages that companies can use for their development (Rezaee, 2018). First, the business and
various divisions are understood and the loose points of business are established, at which
companies will maximally benefit from their growth. The next phase is to see what the company
consumers want and how businesses can satisfy their needs. This will allow the company to
interpret and draw consumers to organizational goods. The third step is to see to it that various
services delivered by the business have to be constantly checked and can assist the company to
serve its clients more effectively. Determine the intensity of the enterprise and use resources to
sufficiently and effectively coordinate all the power to achieve organizational objectives. Build
better organizational structure to promote smooth flows and clear communication.
Utilising ‘Digital’ on internationalise and internalisation process: This is essential for business
entities to implement digitalisation in the internalisation process. There are different types of
methods to do so and some of them are mentioned below in such manner:
Changing determinants of competitive advantages- Digitalisation has been used mainly to gain
profitability by business in encouragement as such goods are customized to consumers' desires
and can significantly satisfy them. As well as it will also allow existing customers to retain the
value of goods when digitalised, and they can serve as a competitive edge for their businesses.
The value chain is also improved (Ledgerwood, 2017).
Reduced transaction costs- Digitalizing of product support organizations as the products become
more common. As well as effective communication between internally and externally company
departments decreases the chances of waste capital and leads towards the enhancement of
customer service. This overall helps to reducing costs both by new technologies and working
system optimization.
Reduced asset and location specificity- It does not help businesses raise their assets and also sets
out a wide business position. Though this does not affect the organization's competitiveness and
remains a strategic advantage for businesses.
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Outsourcing and offshoring- This is the key part of the company where the exporting or
offshoring portion of the supply chain for its services can be balanced and obtained as they can
standardize easily (Norzailan and Othman, 2016).
Different forms of business- There are a vital range of form of business and some of them are
mentioned underneath such as:
B2B framework- This background involved three groups of people manufacturers, wholesalers
and retailers, in which companies are selling their goods to other businesses. More than three
parties can be present, but only three parties are used for classification (Rezaee, 2017). This kind
of trade comes from the continued selling of non-self-consumption products and services. The
individual who sells the commodity in this chain to the ultimate customer becomes the retailer. A
new company would concentrate on this kind of purchase, which will help them digitize the
product and helping them achieve their goal of selling their goods on the market. This would be
helpful for them to be there.
C2C framework- The transaction between manufacturers and retailers takes place within this
system. This transaction is focused on goods and services that are not made by a person himself
or might say it's not a popular part of business dealings because it's the method of selling items
that are pre-fabricated and sales only because of a tiny amount of money.
Role of SME's- In the growth of production enterprises SME play a significant role. The
individual who sells the commodity in this chain to the final customer becomes retailer. A new
company would concentrate on this kind of purchase, which will help them digitize the product
and helping them reach their target of selling their goods on the market (Nickols, 2016). This
form of activity will be based on a new organization that will enable them to digitalize their
product. Along with helping them to achieve the goal of a digitally integrated business by
promoting their goods in the commercialisation of their goods by converting it to digitalisation.
Herein, underneath some key role of SME's are mentioned that are as follows:
Engaging customers- SMEs will support digitization to handle consumers. When small
companies want to support their goals by way of digital use, they can gain profit as much as
possible.
Optimising process- In the context of an enhanced structure, SMEs would also benefit from
digitisation. It also motivates systems and offers organizational management methods. This
would contribute to the realization of organizational goals and long-term priorities.
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Transforming products and services- It also has a key part in converting goods which would help
the organization more. In this way, the product design is strengthened and their consistency,
which eventually leads to different company identities being created and reaching new markets
for the company's products (Sambhanthan and Potdar, 2017). It can also increase the business
trend in businesses where digital technologies can be used to alter operations and enhance output
for the long-term survival.
Role of internalisation- Internationalization plays a variety of roles in changing and empowering
the company to enter the global market and digitalize it to shift its manufacturing tends digitally.
Internationalization acts in an enterprise as a change agent that helps to implement new strategies
and to improve large-scale business operations. This large-scale activity provides incentives to
improve corporate processes and to implement new technologies that help businesses get to work
and transform the company using successful methods.
Digital frame and competitive advantage- Digital frame has some strategic advantages that are
useful for the organisations. Benefits are helping businesses to increase income and growth. If
company has a well run digital platform, it will benefit in the future. This will also allow
businesses to discover new areas and establish new methods for manufacturing goods there.
Company is eager to pursue new markets, but must retain its capital requirements where digital
platforms will help it pursue the world market in organization work.
Global strategy and manufacturing process- The business approach is the one that is used by
companies to predict global network operations. Such strategies include a collection of
regulations that allow the company to sell its goods in spite of the global market. The production
process is the collection of functions for the creation of the product. There is a clear link between
global initiatives and production processes. A mixture of both promotes the use of roles and
obligations by a company and also helps to allow organizations to turn themselves digitally into
self-employed businesses (Amankwah-Amoah, 2016).
Role of strategic thinking- Specific thinking is this concept or way of thought in which managers
of organizations move in a strategic direction in which they achieve their organizational goals
and objectives. Specific tasks must be fulfilled by a strategic thinking company. The key
functions of strategic thinkers are to provide the company with vision, plan and tactics. Vision is
its primary function, because it gives a clear view of firm goals. Strategy and strategies are the
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two functions that provide an company specific direction as to how its objectives can be
accomplished. The idea or way of thinking is tactical.
Cultural/knowledge factors- Cultural considerations include the opinions, beliefs, ways and
actions of individuals found in the external and internal organizational environment. This has an
immense effect on the organization that is trying to change its business and introduce new social
changes into the company. Specific thinking is this concept or way of thought in which managers
of organizations move in a strategic direction where they achieve their organizational goals and
objectives (Peattie, 2016).
Infrastructure- Infrastructure can be described as the combination of all resources, which leaves
and does not leave items that enable organization to function in order to achieve its aims and
goals. The key element in the company's growth and competitiveness is infrastructure. Over the
long run, if businesses are competitive, strong infrastructure must be conceived. The issue of
rigidity of organisation's structure is also addressed by the construction of strong organizational
structures. This also helps to control costs and waste, because improved technology will allow
better use of its resources. It can also help businesses gain disproportionate exposure to new
markets, as they can handle certain tasks with a strong system (Ershadi and Dehdazzi, 2019).
CONCLUSION
On the basis of above project report it can be concluded that businesses can introduce
different types of functions and operations for internationalize it. A variety of approaches may be
utilized by the business for creative approaches to run the companies and find new prospects
with the incentive of development. There are different types of factors that can have an effect on
the competitive edge of companies. For a while, production units can grow slowly but with the
passage of time, they will turn into fully self-owned units. This would also increase enthusiasm,
which in the end increases income and long-term prospects for growth.
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REFERENCES
Books and journal:
Dyllick, T. and Muff, K., 2016. Clarifying the meaning of sustainable business: Introducing a
typology from business-as-usual to true business sustainability. Organization &
Environment, 29(2).pp.156-174.
Rezaee, Z., 2016. Business sustainability research: A theoretical and integrated
perspective.Journal of Accounting Literature,36.pp.48-64.
Galea, C. ed., 2017.Teaching business sustainability: From theory to practice. Routledge.
Chang, S.J., 2016. Sustainable evolution for global business: A synthetic review of the
literature.J. Mgmt. & Sustainability,6, p.1.
Rezaee, Z., 2018. Supply chain management and business sustainability synergy: A theoretical
and integrated perspective. Sustainability,10(1), p.275.
Ledgerwood, G. ed., 2017.Greening the boardroom: Corporate governance and business
sustainability. Routledge.
Rezaee, Z., 2017.Business sustainability: Performance, compliance, accountability and
integrated reporting. Routledge.
Sambhanthan, A. and Potdar, V., 2017. A study of the parameters impacting sustainability in
information technology organizations.International Journal of Knowledge-Based
Organizations (IJKBO),7(3), pp.27-39.
Amankwah-Amoah, J., 2016. Global business and emerging economies: Towards a new
perspective on the effects of e-waste.Technological Forecasting and Social
Change,105, pp.20-26.
Peattie, K., 2016. Green marketing. InThe marketing book(pp. 595-619). Routledge.
Ershadi, M.J. and Dehdazzi, R.E., 2019. Investigating the role of strategic thinking in
establishing organizational excellence model. The TQM Journal.
Nickols, F., 2016. Strategy, strategic management, strategic planning and strategic
thinking. Management Journal,1(1), pp.4-7.
Norzailan, Z., Yusof, S.M. and Othman, R., 2016. Developing strategic leadership
competencies. Journal of Advanced Management Science Vol,4(1).
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