Outsourcing has become one of the most dominant business practices all over the globe. Since nearly all the industries in the world are turning into more competitive ones, there has arisen a need for more specialized products, as well as products of higher quality. This is where outsourcing plays a crucial role: some segments in the production process are contracted to other firms to assure quality and efficiency within the process, which means better delivery of good in the long run.

Consequently, this trend of increased demand for outsources services has pushed the development of infrastructure in these countries. Firms have needed more efficient methods of communicating with other firms since, at times, they need to correspond with the service companies in order to clarify specifications or ensure prompt delivery. Companies rely on strong telecommunication infrastructure since outsourcing services do not usually happen within the same country. Most firms choose to outsource production from less developed countries where the costs of services are significantly lower. For example, the company H&M has their clothes manufactured in places like Bangladesh and China; Thailand is known for being a high quality producer of t-shirts; Polo Ralph Lauren has a popular, well-established relationship with a production company in China called Luen Thai.

It is also evolved into a competitive market for outsourcing providers. Luen Thai has is progressively absorbing the production method in Ralph Lauren’s supply chain, which will make them more money while allowing Ralph Lauren to save money on shipping and production. Moreover, shoe manufacturers in the Philippines, for example, have been losing business to Chinese producers. A report has said that 60% of the shoe production in the Philippines is outsourced from China.

Thus, if there is one indication that tells you that world is moving toward a global society, it is the trend of outsourcing services. For one, this makes things more difficult for the established firms worldwide, since various laws and tariffs, and ultimately, more competition has made company sustenance nearly impossible. Nevertheless, this also permits brilliant prospects for starting businesses. The ultimate winner, though, is the consumer, who will receive better products, whether they are of higher quality or lower price, as long as healthy competition between the firms worldwide is maintained.

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