Question

How doe sthe outsourcing approach challenge the distribution process in international makrets?

Answer 1

The main challenge to the outsourcing approach for distribution process in international market is ensuring best costs related to distribution. The companies choose outsourcing to make financial advantage in business but if the distributers are not selected after thorough examination there are chances of deception through hidden costs. The third parties may charge increased shipping costs adding additional taxes according to the countries. The hidden costs may reduce the cost advantage expected through outsourcing.

Another challenge is ensuring the quality of distribution. The quality of distribution depends on various factors like packaging and delivery in perfect condition and the company may not have control on the third parties to ensure the quality. Third parties may use cheaper alternatives for distribution to reduce the cost and some of the countries give more importance to quality than cost.

Another challenge is meeting the customer demands related to the timeline for delivery. The promised time line may get affected if the third parties do not deliver the products on time. The company may not be able to control the processes to ensure on time delivery of goods particulary in international markets.

Another challenge is that the third party may have contracted with various companies for distribution and may not exercise adequate care in providing the distribution services of a particular company. Customer satisfaction may get affected if the third party does not meet their requirements and hence finding the right partner for outsourcing becomes a challenge.