We had a discussion in the Australian Manufacturing Forum recently. The issue was whether the Australian government should enforce buying “made in Australia” over market competition. The reason for this discussion can be traced to manufacturing cost levels in Australia that are too high in order to compete with Asian manufacturers.

Sennheiser serves as a classical example how German companies deal with high costs in production. It may come as a surprise that Sennheiser manufactures even more in Germany than needed simply because of the required quality. Thinking further, Sennheiser offers an answer to high costs: if you produce value for which your customer is ready to pay a premium, costs are not the determining factor in competition any more.

This is what we teach in Global MBA and how we coach our students to grow business.