(PDF) Offshoring and Outsourcing on business | Assignment
Added on 2020-12-30
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UNIT 11.RESEARCHPROJECT
TITLE “An in-depth research is been conducted on identifying risk and benefits of offshoringand outsourcing on business activities”. The chosen firm is Kingfisher plc on which research isbeen operated. INTRODUCTION Overview and background of research: There are two different concepts known as offshoring and outsourcing that gives anaddition route to the enterprise in respect of the expansion of their business activities. Offshoringmeans getting work completed in a various nation (Caniato and et. al., 2015). Outsourcingintroduces to contracting work out to external enterprise. For this project, kingfisher plc ischosen multinational retailing organisation. The firm was founded by Andy Cosslett, in 1982They have headquarters in London, England, United Kingdom. Company mainly specialise inmarketing and selling of home improvement products such as home appliances, homefurnishings etc. Along with this, company decide to expand their business operations in manyother nations. For this, outsourcing and offshoring are considering two essential type of businesspractice which will help an enterprise in expansion of its business operation. Both type ofbusiness practices have different benefits and risks which will directly influence on businessoperations and success of kingfisher plc. Research aim: Main intent behind conducting this research is “To identify risk and benefits ofoutsourcing and offshoring on business activities. The research is conducted on Kingfisher plc” . Research Objectives: To collect information and understand about concept of Outsourcing and offshoring . To analyse the important benefits of outsourcing and offshoring in context of KingfisherPlc. To assess the undertaken risks of offshoring and outsourcing which have influence onbusiness activities of Kingfisher Plc. Provide suggestion through which Kingfisher Plc could easily improve their businessactivities at overseas market. 1
Research questions: To analyse the benefits of outsourcing and offshoring in regards with Kingfisher Plc.?To analyse the risks associated with offshoring and outsourcing on operating businessactivities in Kingfisher Plc.?What are the different pathways through which Kingfisher Plc could expand businessactivities at international market?Significance and rationale of researchThe given research has its importance for those researchers and scholars that are moreinterested in terms of carrying out their investigation on the given topic such as to identifydrawbacks and advantages of outsourcing and offshoring upon business activities of kingfisherplc. While conducting research methodology, it would be helpful for an investigator to grabinformation’s about outsourcing and offshoring that are directly linked with operating business.Support an investigator by enhancing its knowledge about the concept of offshoring andoutsourcing in context of business (Deftereos, 2016). It will also assist them in making changesin literature review quality, information’s analysis ability and gathering information skills. Suchtechniques are considered best ability which might help a researcher to perform research task inappropriate manner. In given study, the main problem is relating to the maximising amount ofcompetition in the retail sector because of the presence of activity like globalisation. In order toovercoming this issue, kingfisher plc need to conduct an investigation which will help in properidentification about essential significance of outsourcing and offshoring practice. LITERATURE REVIEWA literature review refers as an effective and explicit method which will be applied byresearcher and scholar to identifying accurate information regarding the topic. Main purpose ofof literature review is to explore gaps in previous study and fulfil each objectives of research insystematic manner (Graham and et. al., 2017). The concept offshoring and OutsourcingAccording to the Surbhi S, 2010, Offshoring and outsourcing are two different conceptswhich provides an extra route to the organisation in respect of the expansion of their businessactivities. Both these methods and techniques have their own way of contribution in globalisationof business along with the different benefits which are associated with these methods. Theseparate description of both these methods for clear understanding of their contribution in2
development of businesses is presented below: According to the Jonathan Webb, 2017, this is theconcept which includes relocation of business process from one nation to another. The processwhich is basically transferred includes manufacturing, supporting, accounting etc. The basicreason behind the dissemination of business process is lower labour cost and favourableeconomic conditions. The example from which we can understand the process is about that a oneUK based organisation have production of their goods in Mexico. As per the opinion of JeffreyGlen, 2018, This is the practice which is used by the organisation to expand their businessactivities. This will includes the process where one organisation hire outside party to performtheir services and create goods which was basically performed by the organisation employees inpast. The basic and main advantage behind the acceptance of this method is about cutting of costof their operation and improve profit margin. According to the Aley Brown, 2009, there areseparate benefits which are associated with both methods and gathered by the organisation in thesituation of availing it for their expansion of business at global level. The different kinds ofbenefits which are associated with these methods in respect of Kingfisher Plc are defined below:According to the Peter Hammon, 2016, One of the benefit which can be gathered by KingfisherPlc while using the method of offshoring for globalisation is about reduction of the cost of mostexpensive part which is about Labour. This will provides an opportunity to the businessorganisation to re-invest their funds in business activities to grab any other opportunity present inmarket. This is the main benefit which is associated with the application of this method is aboutcontrol because there is no involvement of any third party in the process of relocation of businessprocess. This will allows an organisation to retain their control and provide direction along withtraining to their staff which leads to accountability in the internal process of the company.According to the Gino Lisondra, 2019,Outsourcing is the process of hiring of external party forcompletion of their work. This will allows an organisation like Kingfisher Plc to get completetheir work with the help of skilled labour which provide more quality in their products andservices. Outsourcing of work by Kingfisher Plc from the nation like India where time zone isdifferent provides an opportunity to operate their function 24 hours and provide maximumsatisfaction to their consumers. Acording to the Simone Seth, 2010, offshoring and outsourcingare refers as a two type of business practice which will help an enterprise in expansion ofbusiness operations at international level. Outsourcing introduces to an enterprise contractingwork out to a third organisation. On the other hand, offshoring introduces to getting work or task3
completed in a various nations, mainly to leverage cost advantages. There are some risks ofoffshoring and outsourcing on business operations and development of kingfisher plc which aredetermined as under: Cultural risk: This type of risk mainly introduced with differing work ethics, varyingcommunication protocols, cultural norms and language difference. Kingfisher plc may bevulnerable to various kind of ethics linked with information sharing. As this risk will also effecton business success and its operations in negative manner. Operations risk: Kingfisher plc face the drawbacks of sub-par level service quality,business interruptions, cost or overruns. Compliance risk and information security risks are oftenincluded under operational risk. As this type of risk negatively impact on business operations andsuccess. Hidden costs: According to Gigi Kizhakkechethipuzha, 2015, outsourcing is famed forcost-effectiveness, hidden or obscure costs may stem in the development time period. Thesecosts mainly develop from unanticipated variations that demand some fast adjustments. Alongwith this, hidden cost will also impact on growth and success of kingfisher plc at global level. Different ways through which Kingfisher Plc can easily enhance their business operations atglobal level.There are different ways which will help kingfisher plc in enhancement of its businessoperations at international level. Market development: According to the Annmarie Hanlon, 2018, market developmentintroduces as an effective strategy for kingfisher plc to improve their business operations bypromoting existing product in new market. Along with this, use of online channels, kingfisherplc can sell their products into new marketplace at low cost. As it will help an enterprise byincreasing customer base and maximising its sale within given time duration. Product development: It is also introduces as an effective strategy which will support anorganisation in improvement of its business operations at global level. With the help of thisstrategy, kingfisher plc introduce new product in existing marketplace. There are different waysthrough which company can easily enhance their operations with the help of productdevelopment such as cheaper manufacture, review packaging, improve quality, ask customers4
and influencers for feedback etc. All these are effective ways which will help company in itsgrowth and success. Adoption of modern promotional techniques: As per the view point of Shreyasi Gose,2018, there are different types of modern promotional techniques such as social mediamarketing, Email marketing, internet ads, product placement etc. All these are essential anduseful for kingfisher plc to promote their products and attract large number of customers withingiven time duration. It will also support an enterprise to improve their operations and accomplishlong term goals within given time duration. RESEARCH METHODOLOGY Research methodology refers as a useful process which is applied by researcher in orderto gather appropriate and relevant data regarding the current study (Gylling and et. al., 2015). Inthis section, various number of research methods will be included which are explained as under: Research Philosophy: Interpretivisim philosophy is most essential will be applied in thisreport. As this philosophy will assist an investigator in evaluating information effectively andsystematically which will further outputs in arriving at the accurate conclusion (Kaur, Singh andMajumdar, 2018). Positivism is another research philosophy which will not appropriate forresearcher while carrying out of investigation systematically. Research Approach: Deductive and inductive are two essential approach of researchwhich will be effective for researcher while accumulation of in-depth and accurate informationabout the current research. According to this project, inductive approach is used because it helpsthem by giving quality and relevant data (Liang and et. al., 2016). On the other side, deductiveapproach is not useful for this project because it require data in form of numbers. There aredifferent reasons for selecting inductive approach for current study. It includes, more realistic,helps in future inquiries, concrete and synthetic, related to time and place, more accurate,dynamic method, valuable to government, complimentary etc. All these are biggest reasons forchoosing inductive approach. Along with this, inductive approach is also useful and valuable forresearcher by providing data in form of qualitative and also helps them by driving validconclusion. 5
Data collection: Primary and secondary are introduces two types of data collectionmethods which will be applied by researcher. As it will help them to gather proper informationregarding the benefits and drawbacks of offshoring and outsourcing business practice onoperations of kingfisher plc. Questionnaire introduces as an effective source of primary researchwhich will help an investigator by providing reliable data about the study (Mihalache andMihalache, 2016). On the other side, books, magazines, journals etc. are identify best sources foraccumulating secondary data regarding the current study. Time Horizon: Gantt chart refers as an effective tool for researcher to use this techniqueand find out starting and ending time duration for completion of research activities (Modarress,Ansari and Thies, 2016). In this chart, different activities have been included which aredetermined as under: 6
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