Abstract
Today’s world is becoming very competitive and companies are going the extra miles and revisiting their strategies to keep up and sustain competitive advantage. Companies are striving towards low cost, high-quality products delivering value to customers therefore a need to focus on core competencies is essential to create that value and minimize overheads. Capitalizing on know-how, brand equity management, customer and partner relationship management, today’s companies drive for building long-term strategic ventures with selected partners in key markets. Companies are realizing the importance of adding value, reducing cost while delivering products to customers smoothly and efficiently therefore gaining market penetration, market development and product development which result in more market shares at minimum cost, better global presence, brand ownership in case of distributor partnership allocation. This study focuses on the many ways of conventional and unconventional outsourcing, to gain competitive advantage while pointing out where outsourcing can be of failure to some companies lacking strategic management. It also shows the importance of intelligent versus traditional outsourcing where factors such as cutting cost, streamlining the operations and creating partnerships have to be more revolving and consider more convergent and divergent thinking adding for instance innovation to cutting cost, or streamlining the value chain as a whole or adding trust based partnership not just an arm length.
Highlights
Today’s world is becoming very competitive and companies are going the extra miles and revisiting their strategies to keep up and sustain competitive advantage
This study focuses on the many ways of conventional and unconventional outsourcing, to gain competitive advantage while pointing out where outsourcing can be of failure to some companies lacking strategic management
A lot of time companies fail in outsourcing and that is due to some major factors mentioned below, the concept has been evolving for about 200 years if you include all types of outsourcing resulting in more complex process (Karthik, 2013a)
Summary
It has shown over the years that outsourcing has been a good strategy in corporate decision making, according to outsourcing Institute, companies scored 9% cost savings while performed an increase of 15% in quality and capacity on average through outsourcing (Elmuti et al, 1998) Outsourcing these days include as well the need to touch on the administration functions to some extent, in addition to machines and equipment procurement, suppliers are being asked to perform certain certification related to the industry. Companies are effectively outsourcing tasks within operations handed to the suppliers when they ask them to perform additional tasks to complete certain operations for them It all depends on the sector and the industry, for instance, it has been noticed that commodities are more likely to be produced overseas using certain technology to accommodate customers demand (Zelinski, 2018). The importance of partnership helps companies to overcome complications related to compliance with country laws, sophisticated transportation systems, political conditions and understanding legal implications in different countries (Karthik, 2013b)
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