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How can outsourcing to emerging markets be used to gain competitive advantage?

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  1. Porter : the attractiveness, the profitability and the competitive advantages of an industry
  2. Near-shoring
  3. Innovation and research and development
  4. Outsourcing in emerging markets

Today, the outsourcing strategy is often implemented to create a competitive advantage over rivals. Businesses now look to achieve sustainable competitive advantages in each step of their supply chain. Outsourcing in emerging countries has become the solution in getting this sustainable competitive advantage as these locations are well-endowed in natural resources and human skills. The reasons of outsourcing are multiple, such as sharing risks or producing efficiently by specialists which the company does not have itself. In the long-term, outsourcing allows companies to be focused on their core-activities. Nowadays, scarce are business functions insulated from outsourcing; finance, call centres, Research and Development (R&D) operations are easily outsourced abroad. However, the Information Technology (ITO) and Business Services Outsourcing (BPO) are the main outsourcing areas as their worldwide performance exceeded US $55 billion in 2008 and grew by 15 to 20% annually since 2004. Outsourcing in emerging markets has become a source of competitive advantage at various levels of the supply chain.

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