Those who stayed loyal : An empirical examination of New Zealand manufacturers surviving in a global market

Purpose – Despite the ability of small and medium enterprise (SME) to successfully outsource production to low‐cost labour markets, some SMEs continue to produce in the domestic market. A sharp decline in the number of New Zealand manufacturers of consumer goods has been observed in the last five years. This raises questions regarding the viability of a domestic manufacturing strategy in a global marketplace. The purpose of this paper is to explore the performance of New Zealand manufacturers who continue to pursue a domestic manufacturing strategy. Design/methodology/approach – The contextual background for the research is discussed first followed by the development of seven hypotheses. An overview of the methodology is presented before the results of statistical tests. A discussion of findings and implications precede concluding remarks. Practical implications – This reasearch suggests that SMEs need not succumb to pressures to shift manufacturing offshore in order to remain competitive in the local market. Findings – Findings suggest that company size, export strategy, and importance placed on non‐financial goals influence the viability of a domestic manufacturing strategy. Originality/value – This paper is unique in that it does not argue domestic manufacturing as an optimal strategy, rather it considers the viability of a domestic manufacturing strategy in the consumer goods market. Furthermore, the paper adds insight on manufacturing strategy when faced with a small domestic market.