Expanding Business Beyond Borders

The concept of international sourcing is quite simple to understand

. Through sourcing internationally, one looks for the most cost efficient location for business. As the name suggests, global sourcing is a concept that involves sourcing goods and services to other countries instead of manufacturing or carrying them out in your own country. The most common products or services outsourced are call centres and labour-intensive goods. India is a favourite choice when it comes to global outsourcing; the reason being the low cost of labour and low cost of advance technologies. The countries that are ahead in international sourcing are the US, South East Asia, and several other European countries. Apart from improving trade relations between countries, global sourcing has many other advantages, which we will discuss further.

Main Advantages:

Expansion: Outsourcing has helped businesses expand, and not only private enterprises but whole of the global economy. The prices of commodities reduce as suppliers and contractors decrease the cost for gaining big contracts.

Quality: One of the advantages of sourcing your work to other countries is acquiring quality goods and services but at a very cost-effective rate. In countries like the US, the cost of labour is quite high, but in low cost countries (LCC) like India and Philippines, you can get the same level of quality but at almost 60% less cost.

Employment Opportunities: It provides ample of employment opportunities. It also offers a better standard of living with higher wages than what a local enterprise has to offer.

Though the opportunities are vast and there are many benefits, you need to tread carefully. While choosing a particular country for trade, one needs to identify the threats and opportunities in advance. You need to understand the culture and the work opportunities present in a particular country before outsourcing your work there. The work culture and ethics differ from country to country; these factors can affect your business.

So try and understand the work environment of a certain place before setting up your business there. If you are new to the concept of sourcing internationally, you could start with component sourcing, and then gradually move on to global. After all, the principle aim of any business is expansion. So why not turn to international sourcing for global exposure?

by: Abhishek

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