Nike Global Outsourcing

[Date of Submission]

Nike Global Outsourcing of Services: Issues and Implications in China

Definition of outsourcing described

Outsourcing is the process of one company contracting with the other in order to provide it with some services that can help it to complete its primary process. In other words it can be said that the company may ask the other company to provide it with some assistance in order to complete the process by taking over a part of the process.

Reasons for outsourcing described

There can be many reasons for the outsourcing of the jobs or parts of the process by a company such as Nike. Some major reasons for outsourcing of Nike can be that the decrease in the costs of manufacturing of the products, which include the employing workers at reduced rates as of the manufacturing within another country, saving overhead costs by not investing in the setup costs or other establishment costs, saving on plant operational costs; these types of costs allow Nike to save a lot from these areas and instead invest in the other areas more, which include areas like advertising, marketing or in increasing the employee pays which in turn responds towards the profitability of the company in the long and the short term as well (Cronin et. al, pp. 2-11).

Outsourcing process described

Benefits: (Describe each bullet)

There are numerous benefits of outsourcing a part or several parts to other companies, these benefits can be defined as:

Lower costs

The costs have substantially lowered as of the outsourcing, as the businesses are now being able to focus on their specialties, which has not only allowed the companies to substantially reduced their fixed costs, operations costs and other such costs but has also allowed the companies to lower further many costs which they were bearing from the other operations that they required except their specialties in order to complete their processes. The costs that have been lowered include costs like overhead costs, establishment costs, operations costs etc.

Improved productivity

As various companies have arose in the market in order to deal with each and every area only in which they specialize in, while the other works can be outsourced to other companies in order to keep themselves concentrated on some of the key specialties in which they specialize, this has allowed the companies to focus more only on those areas in which they specialize thus increase efficiency and the productivity as well.

Higher quality

As the companies have taken charge of those areas only in which they specialize in, while outsourcing the remaining of the processes to other respective companies that specialize in those areas; this has allowed to substantially increase the overall quality of the product and that to at a cost benefit advantage.

Higher customer satisfaction

The customer satisfaction has also increased immensely as the overall costs of the processes has reduced since the reduction of various costs and with the companies operating in the areas in which they specialize in, thus not only reducing the costs immensely but also increasing the quality ...