Outsourcing Benefits Worldwide Entrepreneurship
The idea behind outsourcing is that companies should do the work they do best. It can be, for example, a small business consultant who sets up shop by outsourcing part of their operations to others with more advanced skills.
For example, Henry Ford was at first reluctant to outsource, and kept his operation small. Rather than outsourcing rubber production for tires he preferred to try to grow their own trees in the tropics.
Even though that idea failed, his business became what it is today when he built cars and left tires to Goodyear. The same rationale was applied to car parts, engines, headlights, etc. It makes a lot more sense to buy them from companies who can specialize in these specific functions and products.
No company can stand on its own. Companies that produce the same items will compete with each other, but companies that produce complementary goods will inevitably cooperate and trade with each other. This is a win-win situation. They help each other be successful.
Money and good deals have a way of breaking down barriers. At first, international trade consisted of imports and exports of raw materials needed for manufacturing and buying from other countries what cannot be produced at home.
However, with the lessening of trade restrictions, outsourcing which was seen as an alternative to high labor costs, escalated. The system of interdependence benefited all the players until conditions in the early 2000s made trading and outsourcing temporarily more difficult.
Each country seems to own parts of other countries. However when one is economically strapped, they all suffer. We are now living through such a mix up of international assets. Although somewhat frightening when closely scrutinized, the long term objectives of such buying and selling and business venturing may yet prove to be exactly what the doctor ordered.
Encorpus provides small business consulting and strategies for business startups, product launches, marketing or business development. Encorpus customizes and personalizes every strategy, advisory session or business relationship to you and your company’s special DNA.
Filed under: General Interest