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Outsourcing/Insourcing

Read the following scenario:

Your biggest competitor has just outsourced their Warranty Call Center to India, which will give them a significant cost advantage. In order to remain competitive, the Vice President of your division has requested that you determine your organization's best course of action. At this time, your organization has call center facilities located in Chicago, IL. U.S., with back-up facilities in Lawndale, CA, U.S., and New Brunswick, Canada. You have met with several colleagues to determine what could be included in the proposal. They have recommended that you consider the following:

1. Consider the organization's motivation, short-term and long-term implications
2. Best strategic location:

a) Keeping the call center insourced in North America
b) Insourcing in one of your facilities in another part of the world (China)
c) Outsourcing the call center in North America
d) Outsourcing the call center in another part of the world (China)

Prepare a paper in which you take your colleagues' recommendations into consideration addressing the following items:
a) Document your findings with regard to trade secrets, and patent issues.

Solution Preview

Let us evaluate each of these strategic options one by one:

a) Keeping the call center insourced in North America

This is the current scenario. By sticking to this situation, the firm will not be able to sustain competitive threats because competitors will gain significant cost advantage over our firm, thereby making us less competitive in terms of pricing in the marketplace. The only benefit of sticking to this scenario is that we will have better control over our intellectual property, trade secrets and patents. One of the things we can do in keeping our call center facilties in North America is to find cheaper locations within US, such as cheaper locations like Boise, Idaho, to improve our cost structure. But, it will obviously mean new investments.

b) Insourcing in one of your facilities in another part of the ...

Solution Summary

Outsourcing/Insourcing

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