One of the reasons company outsource their business processes is in other to develop their core competencies. Companies prefer to focus on their competencies they have developed and build a competitive edge on this function. For instance, Coca Cola outsource its bottling of its drinks to other companies while focusing on developing concentrate and marketing of its products. It helps the company to worry less about distribution or day to day functioning outsourced operations. Royalties and licensing fees are paid to Coca Cola.