Benefits and Risks of Outsourcing and Offshoring

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RESEARCH PROJECTTable of Contents
CHAPTER 1: INTRODUCTION....................................................................................................31.1 Overview of the research.................................................................................................31.2 Background of the company............................................................................................31.3 Research Aim...................................................................................................................31.4 Research Objectives.........................................................................................................31.5 Research Questions..........................................................................................................41.6 Rationale of the research..................................................................................................4CHAPTER 2: LITERATURE REVIEW.........................................................................................42.1 The concept of offshoring and outsourcing in regards to business..................................42.2 The benefits and risks of outsourcing and offshoring......................................................52.3 Effectiveness of outsourcing and offshoring on business performance of Sainsbury plc52.4 Different ways through which Sainsbury plc can easily overcome risks of offshoring andoutsourcing.............................................................................................................................6CHAPTER 3: RESEARCH METHODOLOGY.............................................................................73.1 Type of Investigation........................................................................................................73.2 Research Philosophy........................................................................................................83.3 Research Approaches.......................................................................................................83.4 Research Design...............................................................................................................93.5 Data collection method.....................................................................................................93.6 Sampling...........................................................................................................................93.7 Ethical considerations.....................................................................................................10CHAPTER 4: DATA ANALYSIS AND INTERPRETATIONS.................................................10CHAPTER 5: CONCLUSION AND RECOMMENDATIONS...................................................22Conclusion............................................................................................................................22Recommendations................................................................................................................23Reflective statement.............................................................................................................23REFERENCES..............................................................................................................................25
TITLE:To investigate the benefits and the risks of offshoring and outsourcing on businessperformance at global level. A case study onSainsbury plc.”CHAPTER 1: INTRODUCTION1.1 Overview of the researchOutsourcing defines that when an organisation contract to do work with 3rdpartywhereas, offshoring means getting work done in various nations generally leverage costadvantages. These have benefits as well as risk both on the performance of organisation at globallevel (Liang and et. al., 2016). Every organisation is now a days using off-sourcing as well asoutsourcing both and it give positive and negative impact on the business of such business. Thus,this research will going to investigate the risk and benefits related to off-sourcing andoutsourcing on the performance of company at global level.1.2 Background of the companySainsbury's is retailing industry organisation founded in 1869 and its founder is JohnJames Sainsbury. Respective organisation have its headquarter in 33 Holborn, London, EC1,United Kingdom and they are serving within UK only as well as having approx. 1415 shops(González,Gascó and Llopis, 2016). Products offering by sainsbury's are hypermarket,supermarket, superstore, forecourt shop as well as convenience shop. Same company haveseveral competitors within market named as TESCO, Asda, ALDI etc..1.3 Research AimAim of the research:To investigate the benefits and the risks of offshoring and outsourcing onbusiness performance at global level. A case study onSainsbury plc.”1.4 Research ObjectivesTo understand the concept of offshoring and outsourcing in regards to business.To identify the benefits and risks of outsourcing and offshoring.To evaluate effectiveness of outsourcing and offshoring on business performance ofSainsbury plc.Recommenddifferent ways through which Sainsbury plc can easily overcome risks ofoffshoring and outsourcing.
1.5 Research QuestionsWhat is the concept of offshoring and outsourcing in regards to business ?What are the benefits and risks of outsourcing and offshoring ?How to evaluate effectiveness of outsourcing and offshoring on business performance ofSainsbury plc ?What are the different ways through which Sainsbury plc can easily overcome risks ofoffshoring and outsourcing ?1.6 Rationale of the researchMain reasons behind choosing this research project is to identify the impact of offshoringand outsourcing on business performance at global level. Research topic is very large that helpan investigator to learn new things and improve as well as also assist in enhancing their currentskills. Personal reason for choosing this research is to improve different skills such as dataanalysis, data interpretation, literature review and many other. On the other side, professionalreason for choosing this researcher is to explore influence of outsourcing and offshoring and gainbetter advantages for future improvements (Kakabadseand Kakabadse, 2017). Along with this,this research will also assist a investigator in personal manner by enhancing their its literaturereview skills as well as understanding about the data collection or data analysis methods.Therefore, with the aid of literature, a researcher can fulfil research gap in easy manner. Maingap for this research is how to identify importance of severalmarket development strategies inrelation of company. It is a biggest challenge for researcher, for this they need to conduct aresearch and fulfil such type of gaps within systematic as well as effectual way.CHAPTER 2: LITERATURE REVIEW
2.1 The concept of offshoring and outsourcing in regards to businessThe offshoring can be described as the criteria of obtaining facilities or goods from theanother nation. As per opinion given by Jeffrey Glen (2019), it can be considered as primarily ageographical activity as it is beneficial to reduce expenses which facilitate to deliver product tocustomers at reasonable price. However, it has been analysed that there are number of reasonsbehind selecting the option of offshoring such as cost, tax & tariffs and control. Initially, it willfacilitate to provide cost of products at cheaper rate which is favourable for clients andSainsburry plc. However, the company get relief regarding tax & tariffs in few of nations.At the other hand, the outsourcing can be explained as the process in which anorganisation contracting work out to third party. It consist the criteria of obtaining accountingservices or manufacturing of a certain input to other organisation. Meanwhile, it has beenanalysed that outsource can be done to an enterprise which is situated anywhere as the locationof a business concerns is not important (Mihalacheand Mihalache, 2016). There are number ofreasons behind opting outsourcing including cost, specialisation and flexibility respectively. It ishelpful to boost up overall profitability of business concern which is favourable to for anorganisation or improving overall efficiencies of staff members in order to increase the profitsshare in market.2.2 The benefits and risks of outsourcing and offshoringOffshoring provides several benefits such as facilitating lower labour costs which ishelpful for Sainsburry to reduce overall expenses of manufacturing and provide better productsto customers at affordable price. As per views of GINO LISONDRA (2019), It involves theprofits of cost savings and tax benefits as well as financial incentives which is favourable forgiven organisation to increase profitability. In contrary to this, it has a risk of creating social &cultural problems and quality control issues which may develop risk of loosing trust factorsamong customers. However, is also consist risk of creating unemployment in the home countywhich is favourable.The outsourcing is beneficial in context of cost reduction and savings which is suitablefor Sainsburry plc to save overall cost of production in order to improve profits of business. It ishelpful required to concentrate on few things and access of quality, expertise & bettermanagement skills which is appropriate for business concern. Apart from this, it is risky in termsof reducing organisational learning by depleting the skill base and loss of control which is very
important for an organisation to avoid high loss (Rodríguezand Nieto, 2016). It is necessary foran organisation to considered related risk factors to avoid them and grab only profits gained bymethod of outsourcing.2.3 Effectiveness of outsourcing and offshoring on business performance of Sainsbury plcThe method of outsourcing can be considered as an effective technique in respect ofreducing overall cost of manufacturing including labour expense which facilitate to increaseproductivity in regular basis. It is also favourable to improve the strategies regarding quality forcompleting actual needs of customer which facilitate to gain customers satisfaction respectively.However, this technique is much efficient in terms of facilitating concentration towardsdevelopment of business which is beneficial to boost up brand image in market grab more profitshare. As mentioned by O. Zeynep Aksin and Andrea Masini (2019), the method of outsourcingis effective in order to focus on quality and facilitate employees to become more skilled &capable in order to carrying out overall operational activities in more effective as well asefficient way which facilitate to improve clients satisfaction by product. In addition to this, it isalso effective in context of achieving flexibility as well as enhancement of business which ishelpful to improve the brand image on Sainsburry in market.At the other hand, offshoring can be considered as the most effective approach in contextof reducing the overall manufacturing cost which is favourable in terms of attaining better profitsin business (Liu,Wang and Huang, 2017). It involves the criteria of converting extra expensesinto quality improving practices which is suitable for Siansburry to satisfy actual needs, wantsand demands of customers which is helpful to make strong customer base. However, it willprovide support to attract new clients towards brand along with retaining the current whichfacilitate to increase in number of loyal consumers which are considered as long term ofprofitability for an organisation.2.4 Different ways through which Sainsbury plc can easily overcome risks of offshoring andoutsourcingEvery thing have its benefits and risk both same as offshoring as well as outsourcing alsohave. But there are several ways which can be use by organisation to overcome with these.Explanation of these are as follows :-
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