Outsourcing
Outsourcing is better known as the labor contract proved to make it more cost efficient. However, outsourcing is often so polemic because of hanging workers' rights. Here are the factors to be considered in global outsourcing.
- Management vision. Company and product image. For example, Swatch and Canon.
- Cost factors and conditions.
- The cost of land, labor, and capital availability and relatively abudance dependent. Can be changed according to the law of supply and demand.
- Low wage rates are not always the reason for relocation if labor costs are only a small percentage of the total cost.
- Logistics. The distance between the source and target product market affect the delivery time and transportation costs.
- Country's infrastructure. Electric power, transportation, communication, service suppliers and parts, labor reserves, security, civilian rule, and others.
- Political risks. Risk of changes in government policies that may discourage investment.
- Market access. Certain countries restrict access to the trade balance. For example, import duties. A case in point is the investment of Japanese factories in the U.S. automotive companies.
- Foreign exchange rates. Production costs in certain countries is determined by the prevailing exchange rate. Currency fluctuations affect the strategy of diversification of production locations.
Marketing
There are three key importance in the marketing of export products internationally.
1. Extension strategy. Offers no visual changes to the product to be marketed to other countries.
2. Adaptation strategy. Changing elements such as design, functionality, or packaging, in order to respond to market needs in certain countries. Often done because of the laws and regulations in certain countries, such as technical standards and health or safety standards. For example, McDonalds Meals Heavy-Plastic Toys in Europe.
3. Product invention. Develop new products for world markets. Prof. Kim, in the book Blue Ocean Strategy, has to review this with the self-defeating. For example, Microsoft. They are always in front of the products created. Now, Apple's era has arrived. The company Steve Jobs is eroding Microsoft's market with innovative products. For example, I-Pad, I-tunes, and so on.
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