Question

Organizations can become involved internationally in a couple of different ways. One way is to seek cheaper sources of material or labor offshore, which is called offshoring or global outsourcing. Another way is to develop markets for products and services outside their home countries through strategies such as exporting and partnerships. Define and provide with real examples/real practices of outsourcing, exporting, and partnerships.

Answer 1

Outsourcing:-

Citibank N.A , Delware and Citicorp successfully outsourced substantial number of processes pertaining to Financial Reporting Operations (FRO) to Manila, Philippines and several key back office functions for its Institutional Clients Group (ICG), Investment Banking Division (IBD), Citi Reality Services (CRS), Expense Processing Unit (XPU),Third Party Information Systesm Audit (TPISA) etc. to a newly incorporated shared services entity headquartered in Mumbai, India.

All these migrations were planned by a separate inhouse function known as Right Placement Office (RPO). The outsourcing is backed by advancement in information technology and availability of a vast pool of talent to man these business process outsourcing (BPO) and knowledge process outsourcing (KPO) activities.

Exporting:-

Harley Davidson Motorcycles USA has been exporting premium motorbikes to cater to Indian markets. However the turn of events was not on expected lines due to tough competition from domestic brands like Royal Enfield and Java Motorcycles providing more value. Recently Harley Davidson wound up its entire selling and marketing channels in India leaving the existing customers in dark about future servicing of bikes already sold. Though there are market rumors about possibility of a Joint Venture with local two wheeler company to reboot its India strategy.

Partnership: -

Pepsi Beverages have entered into partnerships with several bottlers all over the globe to reduce transportation costs for its raw materials and finished goods for the respective local region and also to leverage on local partners’ market knowledge.