Efficiencies in third world markets
Sunday 2nd October 2011 - By Leo Alarcon Share
Third world countries and emerging markets businesses usually have different standards of operational efficiency, safety and face different competitive environments. Usually technologies aren't as developed or embraced as first world economies due to the cost of labour being lower, a lighter burden of OH&S red tape, and lower law and taxation compliance costs. These are major cost competitive advantages that have fuelled growth in manufacturing industries throughout Asia, India and other emerging markets.
Although many businesses are currently far from efficient in the used of labour, inventory management, process layout, purchasing and selling systems, data analysis, strategy etc, there are opportunities for international firms and astute investors to extract value if the market and business environment is studied and understood.
The implementation of many lean manufacturing techniques and principles as well as investing in modern plant and equipment can definitely yield improvement in the cost base and the quality of products and services provided to customers. This will further enhance the business' competitive advantage and cost position versus other competitors by shifting the cost curve of products and services.
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