Foreign sourcing of inputs is often not a matter of choice to earn higher profits, but simply a requirement to remain competitive. Firms that do not look abroad for cheaper inputs face loss of comp. etitiveness in world markets and even in the domestic market For example, $625 of the $860 cost of producing an IBM computer was outsourced abroad, and most of the major components going into the production of a Boeing 777, and even more for the Boeing 787, are made abroad (see Case Study 7-4 ). U.S. firms now spend more than $100 billion on outsourcing, and by doing so they cut costs 10 to 15 percent. outsourcing accounts for more than one – third of total manufacturing costs by Japanese firms , saving them more than 20 percent of production costs. Such low- cost offshore purchase of inputs is likely to continue to expand rapidly and is being fostered by joint ventures, licensing arrangements, and other nonequity collaborative arrangements. Indeed, this represents one of the most dynamic aspect of the global environment of today.