Using internet resources identify three companies that have recently outsourced part of their value chains. Try to find companies in different industries.
Describe what value chain activities the companies have chosen to outsource in each agreement.
Provide your analysis of the pros and cons of each outsourcing agreement.
Do you think any of these outsourcing agreements may threaten the companies’ competitive capabilities? Why or why not?
Sample Solution
1. Apple Inc.: Apple has outsourced its manufacturing operations to Foxconn Technology Group, an electronics manufacturer in China and Taiwan, since the late 1990s.
2. Amazon: Amazon has outsourced a portion of its customer support services to iQor and Concentrix as part of their business process outsourcing (BPO) strategy.
3. Microsoft Corporation: Microsoft recently announced that it had outsourced a portion of their software development and IT infrastructure management services to Wipro Technologies for an initial five-year contract worth about $180 million.