Romania's Competitive Advantages on the Global Outsourcing Market

Author:Boscor, D. - Baltescu, C.
Position:Dept. of Economic Sciences and Business Administration, Transilvania University of Brasov
Pages:149-154
SUMMARY

The paper applies a conceptual approach combined with analyses of statistics and secondary material and presents advantages and risks of outsourcing, the most important competitive advantages of Asian countries and Romania’s position on the global outsourcing market. The conclusions of the research highlight the strategies that should be used in Romania for sustaining and improving the... (see full summary)

 
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Bulletin of the Transilvania University of Braşov
Series V: Economic Sciences • Vol. 7 (56) No. 1 - 2014
ROMANIA’S COMPETITIVE
ADVANTAGES ON THE GLOBAL
OUTSOURCING MARKET
D. BOŞCOR1 C. BLTESCU1
Abstract: The paper applies a conceptual approach combined with
analyses of statistics and secondary material and presents advantages and
risks of outsourcing, the most important competitive advantages of Asian
countries and Romania’s position on the global outsourcing market. The
conclusions of the research highlight the strategies that should be used in
Romania for sustaining and improving the competitive advantages. Strategies
proposed are linked to higher investments in education, infrastructure, a
better use of tax incentives and a national strategy for attracting investors.
Key words: outsourcing, incentives, advantages.
1 Dept. of Economic Sciences and Business Administration, Transilvania University of Braşov.
1. Introduction
Outsourcing is an allocation of specific
business processes to an external specialist
service provider. Cost reducti on reasons
drive companies to outsource some
activities of the value chain. When
companies use an external supplier to
provide them services as human resources
functions, IT services, customer services,
accounting and technical support they use
the business process outsourcing. Business
process outsourcing includes back office
activities as payroll and billing and front-
office activities as marketing and technical
support [1]. In order to achieve a
sustainable competitive advantage
companies should not rely only on product
innovation but also on low-cost
manufacturing and suppliers’ capabilities to
develop new products. The policy of
product standardization allows cost
reductions and the policy of products
adaptation can satisfy the customers’ needs
but has a negative impact on costs.
Therefore, companies should try to find a
balance between these two policies, using in
the same time the advantages of producing
some components in the firm and the
advantages of outsourcing.
Intrafirm sourcing is the purchase of
components or products from the parents or
their foreign subsidiaries on an “intrafirm”
basis and outsourcing is the purchase of
products from independent suppliers on a
“contractual basis”. Many companies buy
products and components from their
subsidiaries in foreign countries but the new
trends are to gradually switch to
independent foreign suppliers [3].
The US multinationals have used the
strategy of exploiting competitive
advantages of suppliers by introducing on
the markets innovations made by suppliers.

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