Outsourcing is a process that allows enterprises to focus on their quality rather than their costs. Due to the rapid growth of new technologies, changes in the priorities of the sales market, and extreme competition, outsourcing has become critical for businesses. It also allows them to be more flexible. Many famous brands outsource production to countries with low labor costs. This allows them to cut their costs while still producing top-quality products. Outsourced partners may not be able to meet the same standards as the original firm, but they can negotiate with them and get the results they are looking for.
Outsourcing can be beneficial for large firms. For example, large energy companies and automotive brands have used outsourcing successfully to transfer certain functions to specialized firms. Outsourcing is also common in the aerospace and technology industries. Companies like Nike, for example, focus on product design, but outsource their manufacturing process. However, they need to handle departments that are not in line with their core competencies. Examples of this would include IT and finance departments. Apple, for example, outsources the production of its iPhones to Foxconn.
In addition to being an efficient cost-cutting method, outsourcing also enables businesses to concentrate on what they do best. For example, Apple outsources most of its component parts to other companies to reduce its costs. Outsourcing has become so popular in business that the global outsourcing market grew to more than $88 billion in 2015. The top countries for outsourcing are China, India, and Malaysia. Many companies are now looking to outsource parts of their businesses to save costs.
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