Discuss how product variations, security and import constraints, and transportation uncertainty should impact global outsourcing and...
Discuss how product variations, security and import constraints, and transportation uncertainty should impact global outsourcing and marketing decisions
Homework Answers
Below is how the various factors impact global outsourcing and marketing decisions of a firm -
1. As the product variations increase, the decision to outsource the products gains importance as the firm can use the capabilities of other firms which have the flexibility to manufacture different variations of the product.
2. Increase in security and import constraints make outsourcing difficult as it involves complex regulations and increased costs. Hence, in this case, internal manufacturing is preferable.
3. Increased transportation uncertainty results in increase of transportation and logistics costs while making it difficult to meet the demand. Hence, outsourcing is a challenge in this case.
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