OUTSOURCING STRATEGIES: NARROWING THE SCOPE OF OPERATIONS
♦Outsourcing
●Involves farming out value chain activities to outside vendors.
♦Outsource an Activity When It:
●Can be performed better or more cheaply by outside specialists.
●Is not crucial to achieving sustainable competitive advantage and does not hollow out the firm’s core competencies.
●Improves organizational flexibility and speed time to market.
●Reduces risks due to new technology and/or buyer preferences.
●Assembles diverse kinds of expertise speedily and efficiently.
●Allows a firm to concentrate on its core business, leverage key resources, and do even better what it does best.