Syllabus Topic
HSC topic: Operations
influences
globalisation, technology, quality expectations, cost-based competition, government policies, legal regulation, environmental sustainability
Operations management is essential for business success, involving the planning, organizing, and supervision of processes that convert resources into goods and services. Going into 2025, several factors influence operations management, including globalisation, technology, quality expectations, cost-based competition, government policies, legal regulation, and environmental sustainability. These elements present both challenges and opportunities for businesses aiming to optimise efficiency and stay competitive.
GLOBALISATION
Globalisation continues to reshape operations management, expanding markets and supply chains across borders. Companies like Apple source components from around the world and assemble products in low-cost regions, enabling economies of scale. However, globalisation also exposes businesses to risks like supply chain disruptions and geopolitical tensions, as seen during the COVID-19 pandemic and U.S.-China trade issues.
TECHNOLOGY
Technology is revolutionising operations management. Advancements like Artificial Intelligence (AI), robotics, and blockchain drive efficiencies in production and distribution. For example, Amazon uses robots and drones in its warehouses to speed up sorting and delivery, cutting human error and reducing costs. Blockchain is also improving supply chain transparency, with companies like Walmart using it to track food product origins and improve safety.
QUALITY EXPECTATIONS
Consumers today demand high-quality products and seamless experiences. According to PwC, 73% of consumers consider experience as the most important influence to making a purchase. To meet these expectations, companies like Tesla continue innovating with high-quality EVs, offering software updates to enhance vehicle performance. Similarly, Apple remains a premium brand by ensuring strict quality control over its products, maintaining consumer trust and loyalty.
COST-BASED COMPETITION
Cost-based competition requires businesses to streamline operations and reduce expenses. In 2024, rising inflation pressured companies to implement lean management practices. Walmart uses efficient inventory management and automation to reduce costs, enabling it to offer competitive prices. Companies like Maersk are also investing in AI to optimize operations.
GOVERNMENT POLICIES
Government regulations shape operations management by setting standards on taxation, trade, and environmental practices. In 2024, the EU Green Deal mandated stricter emissions targets, prompting businesses to innovate sustainably. Volkswagen, for example, has invested in electric vehicles to meet regulatory standards in Europe.
LEGAL REGULATION
Legal regulations also impact business operations. The General Data Protection Regulation (GDPR) in the EU continues to require companies like Meta to enhance data security and protect customer privacy. Similarly, new EU regulations require smartphones to adopt the USB-C charger, forcing Apple to redesign its products to comply with the new standard.
ENVIRONMENTAL SUSTAINABILITY
Environmental sustainability has become a priority in 2024, as businesses respond to consumer demand for eco-friendly practices. PwC’s Global Investor Survey 2023 found that 69% of investors now consider Environmental, Social, and Governance (ESG) factors in their decisions. Companies like Patagonia and IKEA are integrating sustainability into their operations, from using recycled materials to reducing carbon emissions.
CONCLUSION
In 2025, globalisation, technology, quality expectations, cost-based competition, government policies, legal regulations, and environmental sustainability all continue to influence operations management. By adapting to these factors, businesses can enhance efficiency, customer satisfaction, and competitiveness in a rapidly evolving global marketplace.
SOURCES:
World Trade Organization (WTO): Official Website
IBM: Official Website
PwC: Official Website
Walmart: Official Website
Investopedia: Official Website
Global Reporting Initiative: Official Website
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