Kingfisher plc: Research on Offshoring and Outsourcing Strategies

This report presents an in-depth research project focused on identifying the risks and benefits of offshoring and outsourcing on the business activities of Kingfisher plc, a multinational retailing organization specializing in home improvement products. The research aims to understand the concepts of outsourcing and offshoring, analyze their benefits and risks, and suggest strategies for improving business activities in overseas markets. The study explores the literature review on offshoring and outsourcing, including the benefits such as cost reduction and control, and risks like cultural and operational challenges. The research employs interpretivism philosophy and an inductive approach, collecting primary data through questionnaires and secondary data from books and journals. Thematic analysis is used to analyze the data. The report also discusses different ways Kingfisher plc can enhance its business operations at a global level, including market development, product development, and the adoption of modern promotional techniques.

UNIT 11.
RESEARCH
PROJECT

TITLE
“An in-depth research is been conducted on identifying risk and benefits of offshoring
and outsourcing on business activities”. The chosen firm is Kingfisher plc on which research is
been operated.
INTRODUCTION
Overview and background of research:
There are two different concepts known as offshoring and outsourcing that gives an
addition route to the enterprise in respect of the expansion of their business activities. Offshoring
means getting work completed in a various nation (Caniato and et. al., 2015). Outsourcing
introduces to contracting work out to external enterprise. For this project, kingfisher plc is
chosen multinational retailing organisation. The firm was founded by Andy Cosslett, in 1982
They have headquarters in London, England, United Kingdom. Company mainly specialise in
marketing and selling of home improvement products such as home appliances, home
furnishings etc. Along with this, company decide to expand their business operations in many
other nations. For this, outsourcing and offshoring are considering two essential type of business
practice which will help an enterprise in expansion of its business operation. Both type of
business practices have different benefits and risks which will directly influence on business
operations and success of kingfisher plc.
Research aim:
Main intent behind conducting this research is “To identify risk and benefits of
outsourcing 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 Kingfisher
Plc.
 To assess the undertaken risks of offshoring and outsourcing which have influence on
business activities of Kingfisher Plc. Provide suggestion through which Kingfisher Plc could easily improve their business
activities at overseas market.
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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 business
activities in Kingfisher Plc.? What are the different pathways through which Kingfisher Plc could expand business
activities at international market?
Significance and rationale of research
The given research has its importance for those researchers and scholars that are more
interested in terms of carrying out their investigation on the given topic such as to identify
drawbacks and advantages of outsourcing and offshoring upon business activities of kingfisher
plc. While conducting research methodology, it would be helpful for an investigator to grab
information’s about outsourcing and offshoring that are directly linked with operating business.
Support an investigator by enhancing its knowledge about the concept of offshoring and
outsourcing in context of business (Deftereos, 2016). It will also assist them in making changes
in literature review quality, information’s analysis ability and gathering information skills. Such
techniques are considered best ability which might help a researcher to perform research task in
appropriate manner. In given study, the main problem is relating to the maximising amount of
competition in the retail sector because of the presence of activity like globalisation. In order to
overcoming this issue, kingfisher plc need to conduct an investigation which will help in proper
identification about essential significance of outsourcing and offshoring practice.
LITERATURE REVIEW
A literature review refers as an effective and explicit method which will be applied by
researcher and scholar to identifying accurate information regarding the topic. Main purpose of
of literature review is to explore gaps in previous study and fulfil each objectives of research in
systematic manner (Graham and et. al., 2017).
The concept offshoring and Outsourcing
According to the Surbhi S, 2010, Offshoring and outsourcing are two different concepts
which provides an extra route to the organisation in respect of the expansion of their business
activities. Both these methods and techniques have their own way of contribution in globalisation
of business along with the different benefits which are associated with these methods. The
separate description of both these methods for clear understanding of their contribution in
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development of businesses is presented below: According to the Jonathan Webb, 2017, this is the
concept which includes relocation of business process from one nation to another. The process
which is basically transferred includes manufacturing, supporting, accounting etc. The basic
reason behind the dissemination of business process is lower labour cost and favourable
economic conditions. The example from which we can understand the process is about that a one
UK based organisation have production of their goods in Mexico. As per the opinion of Jeffrey
Glen, 2018, This is the practice which is used by the organisation to expand their business
activities. This will includes the process where one organisation hire outside party to perform
their services and create goods which was basically performed by the organisation employees in
past. The basic and main advantage behind the acceptance of this method is about cutting of cost
of their operation and improve profit margin. According to the Aley Brown, 2009, there are
separate benefits which are associated with both methods and gathered by the organisation in the
situation of availing it for their expansion of business at global level. The different kinds of
benefits 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 Kingfisher
Plc while using the method of offshoring for globalisation is about reduction of the cost of most
expensive part which is about Labour. This will provides an opportunity to the business
organisation to re-invest their funds in business activities to grab any other opportunity present in
market. This is the main benefit which is associated with the application of this method is about
control because there is no involvement of any third party in the process of relocation of business
process. This will allows an organisation to retain their control and provide direction along with
training 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 for
completion of their work. This will allows an organisation like Kingfisher Plc to get complete
their work with the help of skilled labour which provide more quality in their products and
services. Outsourcing of work by Kingfisher Plc from the nation like India where time zone is
different provides an opportunity to operate their function 24 hours and provide maximum
satisfaction to their consumers. Acording to the Simone Seth, 2010, offshoring and outsourcing
are refers as a two type of business practice which will help an enterprise in expansion of
business operations at international level. Outsourcing introduces to an enterprise contracting
work out to a third organisation. On the other hand, offshoring introduces to getting work or task
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completed in a various nations, mainly to leverage cost advantages. There are some risks of
offshoring and outsourcing on business operations and development of kingfisher plc which are
determined as under:
Cultural risk: This type of risk mainly introduced with differing work ethics, varying
communication protocols, cultural norms and language difference. Kingfisher plc may be
vulnerable to various kind of ethics linked with information sharing. As this risk will also effect
on 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 often
included under operational risk. As this type of risk negatively impact on business operations and
success.
Hidden costs: According to Gigi Kizhakkechethipuzha, 2015, outsourcing is famed for
cost-effectiveness, hidden or obscure costs may stem in the development time period. These
costs mainly develop from unanticipated variations that demand some fast adjustments. Along
with 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 at
global level.
There are different ways which will help kingfisher plc in enhancement of its business
operations at international level.
Market development: According to the Annmarie Hanlon, 2018, market development
introduces as an effective strategy for kingfisher plc to improve their business operations by
promoting existing product in new market. Along with this, use of online channels, kingfisher
plc can sell their products into new marketplace at low cost. As it will help an enterprise by
increasing customer base and maximising its sale within given time duration.
Product development: It is also introduces as an effective strategy which will support an
organisation in improvement of its business operations at global level. With the help of this
strategy, kingfisher plc introduce new product in existing marketplace. There are different ways
through which company can easily enhance their operations with the help of product
development such as cheaper manufacture, review packaging, improve quality, ask customers
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and influencers for feedback etc. All these are effective ways which will help company in its
growth 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 media
marketing, Email marketing, internet ads, product placement etc. All these are essential and
useful for kingfisher plc to promote their products and attract large number of customers within
given time duration. It will also support an enterprise to improve their operations and accomplish
long term goals within given time duration.
RESEARCH METHODOLOGY
Research methodology refers as a useful process which is applied by researcher in order
to gather appropriate and relevant data regarding the current study (Gylling and et. al., 2015). In
this 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 this
report. As this philosophy will assist an investigator in evaluating information effectively and
systematically which will further outputs in arriving at the accurate conclusion (Kaur, Singh and
Majumdar, 2018). Positivism is another research philosophy which will not appropriate for
researcher while carrying out of investigation systematically.
Research Approach: Deductive and inductive are two essential approach of research
which will be effective for researcher while accumulation of in-depth and accurate information
about the current research. According to this project, inductive approach is used because it helps
them by giving quality and relevant data (Liang and et. al., 2016). On the other side, deductive
approach is not useful for this project because it require data in form of numbers. There are
different 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 for
choosing inductive approach. Along with this, inductive approach is also useful and valuable for
researcher by providing data in form of qualitative and also helps them by driving valid
conclusion.
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Data collection: Primary and secondary are introduces two types of data collection
methods which will be applied by researcher. As it will help them to gather proper information
regarding the benefits and drawbacks of offshoring and outsourcing business practice on
operations of kingfisher plc. Questionnaire introduces as an effective source of primary research
which will help an investigator by providing reliable data about the study (Mihalache and
Mihalache, 2016). On the other side, books, magazines, journals etc. are identify best sources for
accumulating secondary data regarding the current study.
Time Horizon: Gantt chart refers as an effective tool for researcher to use this technique
and 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 are
determined as under:
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Data analysis: For this report which is on identifying the advantages and disadvantage of
offshoring and outsourcing on business operations of kingfisher plc, information will be analysed
by the investigator by following quantitative technique thematic analysis. In this case, different
number of themes will be developed on each questions (Musteen, 2016). As it will support
researcher to minutely analysis response from the respondents. Along with this, thematic analyse
will also use for this project. As it will help a researcher to perform each activities of
investigation in systematic and effective manner.
Sampling: Probability and non-probability are introduces as a two type of sampling
method. For this project, probability sampling will be used because it helps an investigator by
saving its cost, time and resources (Oshri, Kotlarsky and Willcocks, 2015). With the assist of this
sampling, 50 employees of kingfisher plc have been recruited. On the other side, non-probability
sampling is not useful for this study because it require more time of an organisation. Probability
sampling provides better chance to the investigator to develop a sample that is really
representative of the population. This method is fit according to the current study because it will
support an investigator to select sample of the population on random basis. This method also
support an investigator to choose select out of total population.
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Research limitation: While accumulating the information for the current investigation,
accessibility introduces one of the main issues for researcher. As it will impact on researcher
while doing investigation in proper manner (Patrucco, Scalera and Luzzini, 2016). Along with
this, there are some other issues which are faced by investigator such as time, cost, inaccurate
behaviour of respondents etc. All these are major issues which will effect on researcher while
performing research activities in systemic manner.
DATA ANALYSIS AND INTERPRETATIONS
Questionnaire
Q1) Are you have knowledge about the concept offshoring and Outsourcing?
a) Yes
b) No
Q2) According to you, outsourcing and offshoring are main parts of globalisation?
a) Yes
b) No
Q3) What are the main reason of Kingfisher Plc for globalising their business operations?
a) Improved quality of management
b) Reduction in business cost
b) Law of comparative advantage
Q4) Explain about the benefits of offshoring in context of Kingfisher Plc.?
a) Close Collaboration
b) Favourable government Policies
c) Business Growth
Q5) What are the advantages of outsourcing on business operations of Kingfisher Plc?
a) Reduce cost of operations
b) Increase flexibility
c) Improves productivity
Q6) Different risks of offshoring on business operations of Kingfisher Plc.?
a) Culture-Barrier
b) Lack of Technological Advancement and Skills
c) Legal Problems
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d) Lack of Proper Work Dissemination
Q7) What are the drawbacks of outsourcing on business success and growth of an organisation
at international level?
a) Cultural and social Differences
b) Security issues
c) Communication problems
Q8) How to reduce risks of offshoring on business operations of Kingfisher Plc?
a) Adoption of training programme
b) Implementation of new technology
c) Tie up with legal agency
d) Adoption of Flat business structure
Q9) What are the ways by which risk of outsourcing on business operations of an organisation
can be overcome by Kingfisher Plc?
a) Adoption of common ethics and moral policies
b) Appointment of legal hirers
c) Usage of reliable written communication methods
Q10) Different ways through which Kingfisher Plc can easily enhance their business operations
at global level?
a) Market development
b) Product development
c) Adoption of modern promotional techniques
Q11) As per your opinion, what type of business practices important for Kingfisher Plc while
globalising their business operations?
a) Outsourcing
b) Offshoring
Q12) Does outsourcing helps Kingfisher Plc in achievement of competitive advantages?
a) Yes
b) No
Q13) What are the factors require by Kingfisher Plc while globalising their business through
outsourcing?
a) Skilled workforce
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b) Sufficient time
c) Accurate amount of capital
Q14) Does Kingfisher Plc found issues regarding cultural difference while outsourcing its
business operations?
a) Yes
b) No
Q15) Provide any recommendation for further improvement in business growth of Kingfisher
Plc at international level?
Q1) Are you have knowledge about the concept offshoring and
Outsourcing?
Frequency
a) Yes 40
b) No 10
Q2) According to you, outsourcing and offshoring are main parts of
globalisation?
Frequency
a) Yes 35
b) No 15
Q3) What are the main reason of Kingfisher Plc for globalising their
business operations?
Frequency
a) Improved quality of management 15
b) Reduction in business cost 16
c) Law of comparative advantage 19
Q4) Explain about the benefits of offshoring in context of Kingfisher
Plc.?
Frequency
a) Close Collaboration 20
b) Favourable government Policies 16
c) Business Growth 14
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