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Monday, January 12, 2009

How Market Demand, Competition and Outsourcing Industry are Interrelated.

“While there is demand for market of a certain product or service and when the competition is high, outsourcing industries will continue to rise.’’ Outsourcing is the transfer of responsibility to a company to do a specific corporate function. Business Outsourcing Process and Information Technology Industry exists because a company which is quality output- oriented will not jeopardize its main product being produced on the market .That is why there increasing outsourcing institution on the market today.
Market demand creates an atmosphere of opportunity for this industry. According to economic theorists ,A business venture is consists of five components essential for its existence, survival and growth -- market, products and services (technology), organization, people, and finance. These components are indispensable from one another . It means that one component cannot be deleted from the rest.When one component is taken away a the company ceases its function either to cater service or produce output. All of these component possesses unlimited potentials that can be utilized to transform the component into a map to direct the growth of the company. It is the main reason why outsourcing was given importance by companies .When the demand for products and services is very high, the company needs to focus on its production/service ,and outsourcing is an alternative .This is done to redirect the company in achieving its target and serving its mission or purpose on a given field.
Competing companies will focus on their own respective expertise (field) .These companies will gradually contract service providers to do their subsidiary responsibilities(HR functions, Accounting functions or technology functions )The impact of competition on the market is significant. It is manifested on the services/ product prices and promotions in advertisements. Large companies on the other hand, cannot afford to have distraction on subsidiary company roles that may result to lapses on production/service. More likely companies will upgrade its products/services; and the non-related functions in terms of companies’ field or industry will be outsourced.
The advantage of a company being outsourced is that the company will be worry free in a specific corporate function like accounting, HR or technology aspect . There is already that external service provider to cater those needs/functions .This is where outsourcing enters into the picture . The companies also chose to outsource some function to minimize costs. That is why most company will chose those who outsourcing firms which are cheap yet has quality output .
The outsourcing industry is driven by the dynamic market changes especially in competition as well as technology advancement. The market demand is responsible of for the creation of these industries .The expansion/evolution of the business may have also contributed for the industry’s existence. The competition that took place within the large companies or medium companies in the world market aggravates the demand for the industry. But somehow these domino effect s is a positive response to our technologies’ innovation. For as long as people will continue to think, there will always be changes, and the outsourcing industry is only a part of it.

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