¶ … business has a relatively low level of globalisation. On the production side, the company has maintained production in the UK and sources most of its materials in the UK as well. The level of globalisation in production is therefore very low.
In terms of sales, the company sells its bears primarily in the UK, but has also developed some overseas markets. There are individual collectors located overseas who can interact with the company via multiple different modes of communication. There are also one or two trade customers who are located in other countries. There is significant sales potential if the company can increase the globalisation of its customer base.
The business in which the company operates, however, is highly globalised. Firms typically are involved in the design and marketing steps of the process in their home markets, but source their manufacturing in other countries. By having teddy bears produced overseas, the price of the bears is much lower than that of Merrythought's bears. This has changed the market for the bears to one where price is a primary consideration for most customers. Most companies in the market, therefore, are producing products intended to have short lifespans, and to be purchased almost on impulse. The high cost of production at Merrythought has forced the...
One imagines that when the company started it was not competing against low-priced competitors and therefore was not forced to occupy a high-end niche in the market. The company's new market positioning has been the direct result of the globalisation of the supply chain in the stuffed toy business.
The globalised supply chain has affected the company's finances. Merrythought struggles to be profitable. This is likely the result of being forced into a niche by companies that are able to sell at a much lower cost. The company's finances and current market position are therefore both the result of the gradual globalisation of the business. Its solutions lie in using the forces of globalisation to its advantage, something the previous administration does not appear to have done particularly well.
2. For Merrythought, the most important driver of globalisation to this point has been cost, but ultimately the company needs it to be market. Government is not particularly relevant, because the UK government promotes free enterprise, something that allows for foreign competition in the market. However, Merrythought is equally capable as its rivals of using overseas manufacturing, so its current position is the result of company choice not government policy. Likewise,…
