Key Concept of the profits of outsourcing

Question

Illustrates the Key Concept of the profits of outsourcing?

Answer 1

Key Concept:

A company should normally not execute any value chain activity internally that can be performed more effectively or more efficiently by its foreign business partners – the main exception is when an activity is strategically critical and internal control over that activity is deemed necessary.

Often many of the benefits of executing value chain activities in-house can be captured and many of the drawbacks avoided by outsider close, long-term cooperative partnerships with main suppliers and tapping into the valuable competitive capabilities that able suppliers have carefully developed.