7008IBA CASE ANALYSIS 2
NOTE: Only one member of your group is required to submit the case analysis through the submission point. You must use this template for your analysis. All members must individually complete an electronic coversheet.
See marking rubric for criteria for guidance. Criteria includes critical analysis, comprehensiveness and clarity in writing within 500 word limit (+/- 10%), as well as application of coursework theory to the case study and use of at least five peer-reviewed articles.
People who did not contribute to group work should not be listed here as they are not authors of the submission–group members not listed here will not receive any marks for this particular assessment.
Question 1: Imagine you are on the Federal Government manufacturing taskforce (referred to in the case study). Use Porter’s Diamond Model to analyse the Australian manufacturing industry (write/display key points of analysis) –what would you advise government to do?
Australia’s manufacturing has been in terminal decline mainly because of its lack of competitive edge over the years, but this pandemic may revive it. Many countries are suffering from the unfortunate pandemic that caused shutting down of many factories overseas thus some local customers are looking for local substitutes (Pupazzoni, 2020). Consequently, the intense domestic rivalry is likely to push Australia to innovate on new technologies. The government should increase manufacturing funds to encourage investment in new technology and stimulate further research.
Australia is a resource-exporting economy, and domestic energy policies have not effectively used this energy advantage. In 2019, 75% of Australia's exports are primary products (Australian government, 2019). It can be seen that Australia’s limited manufacturing level makes its good resource conditions not properly used. Porter’s state that the country’s competitive advantage is based on primary production factors is unstable. Therefore, the government should upgrade the industrial structure and production skills, and increase the added value of products and energy.
Due to the economic shutdown that led by COVID-19, Australia’s dependence on manufactured goods from overseas has become a noticeable issue (Quince & Kesteven, 2020). Home market demand increases when the need for domestic manufacturing is required because many exports from overseas become unavailable. In order to gain a competitive advantage from this pandemic, the government should re-evaluate the supply chain and also focus on niche areas where Australian manufacturing is performing well.
High labor costs and imperfect upstream and downstream industrial chains are important factors that have led to the slow development of Australian manufacturing (Kelly & La cava, 2014). Therefore, it is necessary to increase spending on industrial infrastructure and major projects and establish strongly related and supporting industries. In addition, the government should continue to provide tax relief for manufacturing investors and simplify the approval time and process to facilitate competition in the future.
Australian government. (2019). Trade and Investment at a Glance 2019. Retrieved from https://www.dfat.gov.au/about-us/publications/trade-investment/trade-at-a-glance/trade-investment-at-a-glance-2019/Pages/default.
Kelly, G., & La Cava, G. (2020). The Structure of Australia's Domestic Supply Chain | RDP 2014-07: International Trade Costs, Global Supply Chains and Value-added Trade in Australia. Retrieved from https://www.rba.gov.au/publications/rdp/2014/2014-07/str-aus-dom.html.
Pupazzoni, R. (2020). Australia ranks last in manufacturing self-sufficiency but coronavirus may change that. Retrieved from https://www.abc.net.au/news/2020-07-23/coronavirus-pandemic-leads-to-australian-manufacturing-revival/12481568.
Quince, A., & Kesteven, S. (2020). 'A sheltered gravy train': How Australia lost its manufacturing might. Retrieved from https://www.abc.net.au/news/2020-06-08/australian-manufacturing-rise-and-fall-lessons-post-coronavirus/12295518.
Question 2: What CAGE (cultural, administrative, geographic, economic) distance considerations does the Australian manufacturing industry need to be aware of? Why?
Although Australia is a developed country, its manufacturing industry is very underdeveloped. The following will analyze the problems existing in the Australian manufacturing industry from four aspects.
Cultural differences - Manufacturing has been an integral part of the Australian economy. Workforce diversity is often viewed as a double-edged sword, which can yield both negative and positive outcomes. Workplace diversity can provide a lot of benefits, but it has its challenges. At the moment, workplace diversity poses various challenges, particularly in terms of the race along with communication breakdown, low cohesion, and high turnover (Brian D'Netto, 2013).
Administrative differences - Australian government has taken an uneven approach to deregulate the manufacturing industry. Manufacturing organizations in the country are undergoing radical reforms to adapt to several changes in the environment. To survive this period, it is essential to respond in a way that allows them to meet daily business activities by changing government industry policy (Chapman).
Geographical Differences - The manufacturing industry has been impacted because of the lockdowns in many countries. This impacts the movement of goods and the supply chain as the spread of the virus in Europe and the US has blocked the movement of materials worldwide affecting the Australian manufacturing industry.
Economical Differences - According to the economic situation in the manufacturing industry, few industries are facing high demand and supply due to the outbreak. For instance, An Australian hand sanitizer manufacturing company faced a financial situation, as the sanitizer company has been producing more than 60℅ of the total capacity. The company had to use its full capacity for production by increasing the working hours for the employee.
In conclusion, recognition of these factors can improve Australia’s manufacturing sector.
Brain D'Netto, J. S. (2013). Human Resource diversity practice in Austrailian manufacturing industry. The international journal of Human Resource management.
Chapman, R. L., n.d. Continuous improvement strategies across selected Australian manufacturing sectors. Retrieved from https://www-emerald-com.libraryproxy.griffith.edu.au/insight/content/doi/10.1108/14635779710181415/full/pdf?title=continuous-improvement-strategies-across-selected-australian-manufacturing-sectors.
Total Word Count
500 word maximum (+/- 10%)
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