Page 27 - Microsoft Word - 00 CIMA F1 Prelims STUDENT 2018.docx

The modern business environment

Characteristics of the modern

business environment

1.1 Global environment

 Companies operate in a world economy.

 Customers and competitors come from all over the world.

 Products are made from components from around the world.

 Firms have to be world class to compete.

 International regulations.

1.2 Flexibility

 In a global environment, customers have far greater choice than ever before.

 Huge increase in demand for new, innovative products.

 Customers demand ever-improving levels of service in cost, quality, reliability
flexibility and delivery.

 Many companies now have very diverse product ranges, with a high level of
tailor-made products and services.

 Product life cycles have reduced, often from several years to just a few months.

The move away from standardised units of production towards
individual customised units means that mass production techniques are
redundant.

Instead, it is of greatest importance to take an order from placement to
completion in the shortest time possible.

This means that production processes will be designed differently to
accommodate flexibility of production rather than just throughput.

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