Question

Entrepreneurship and Effective Small Business Management, Student Value Edition (11th Edition)

What advantages have companies gained by outsourcing their manufacturing operations to factories in foreign countries?

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Answer 1

The following are some advantages that companies have gained by outsourcing their manufacturing operations to factories in foreign countries :

• Companies have been able to utilize assets already in place without having to make an investment in fixed costs
• Many companies find lower labour costs when they outsourcing manufacturing operations
• It helps the companies to focus on their core competency and outsource the non core operations
• Outsourcing also at times leads to lower overhead costs