Question

For a company like Nike, what are the advantages and disadvantages of using an outsourcing strategy?

Answer 1

Advantages of outsourcing
1. Access to low cost labour and plenty of manpower to scale up production
2. Low employee turnover or number of employees to be employed.
3. Increased focus on marketing and design as production process is outsourced.

disadvantages
1. The quality of its products could be compromised.
2. The human rights issue of the labour working in the outsourced factories where the owners violate the minimum wages act and also workers work in inhuman conditions.
3. Outsourcing makes the design availlable to others and it increases the cheap imitiations of their products which decreases their revenues