Manufacturing companies operating in a high-cost environment are facing many challenges attempting to achieve a competitive advantage. These challenges have encouraged manufacturing companies to relocate their manufacturing operations from a high-cost to low-cost environment, creating issues for the western social welfare. Manufacturing companies located in a high-cost environment must be able to improve their overall competitiveness to maintain their manufacturing in such environment.

Research has shown that the competitive success of a company depends on its ability to identify, develop and improve those operations capabilities that have the highest impact on their competitiveness. However, the literature provides limited emphasis on critical operations capabilities for competitive manufacturing in a high-cost environment. Therefore, the purpose of this research is to investigate critical operations capabilities and how they contribute to a competitive advantage in a high-cost environment.

To fulfill the purpose, two research questions have been formulated. The first research question is: what are the critical operations capabilities for competitive manufacturing in a high-cost environment? The second research question is: How do critical operations capabilities contribute to competitive advantage in a high-cost environment? The research questions were answered through different studies and the implementation of different research strategies.

This thesis contributes with increased knowledge on critical operations capabilities in a high-cost environment and how they contribute to a competitive advantage. This research has provided an updated and modernized framework of critical operations capabilities in a high-cost environment. Furthermore, this research has also offered an overview on different strategies which are implemented in a high-cost environment for reaching a competitive advantage. Thus, it also included an analysis on challenges and solutions faced by competitive manufacturing in a high-cost environment.