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Issues in sourcing strategies: strategic alliances, market transactions, fully integrated SC

Issues in sourcing strategies: strategic alliances, market transactions, fully integrated SC

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There are different issues in sourcing strategies. The first issue is cultural differences that affect the development of harmony and synergy between the two organizations. For example, two organizations going for the strategic alliance cannot work successfully without eliminating the cultural differences. The second issue is the scope of dilution of the brand and lack of control. It comes when strategic alliance like franchisee model and or contract manufacturing is used. It has the scope to lose the control out of the parent organization. The third issue is the bullwhip effect that can take place in integrated supply chain. Though the integration can help reduce the scope of with flexibility, but it can come into play if there are uncertainties in the business environment. The fourth issue is political risk presented by the new market that can derail the strategy of sourcing.

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