In today’s global market, competition has become a race to acquire skills and competencies as well as a battle for market position especially in the domestic electronics industry where companies increasingly compete on responsiveness and flexibility, placing a premium on first-mover advantages.(Bryce et al., 1998)
According to Slack, strategic decisions and tactics aimed at maintaining profitability and growth are derived from a firm’s capabilities, resources and processes. (Slack et al., 2009b).
Improving those performance drivers leads to competitive advantages that are significant in winning and maintaining customers, while gaining more business to the firm. (Slack et al., 2009a).
Porter believes that a firm can outperform its rivals if it can establish a difference that it can preserve. This could be through delivering greater value to its customers or creating value at a lower cost, or both. Such differentiation arises from the choice of strategic objectives and how activities are performed better than rivals across the value chain. (Porter, 1996a)
Each company decides on which performance building blocks (Figure 1) they wish to excel at to deliver a unique mix of value, and how to configure their value chain for best fit (Neely, 2008). This is done either through focusing on core competencies inside the firm itself, or leveraging external capabilities through outsourcing and partnerships.
The goal of this paper is to discuss the main strategic reasons behind outsourcing, its importance to the domestic electronics industry and whether it can provide a sustainable competitive advantage to that sector. Furthermore, this paper will highlight the rationale behind outsourcing decisions verses insourcing, and its relationship to a company’s strategic capabilities.
To illustrate the arguments, the paper utilizes management tools including Porter, Value chain, SWOT, RV, VRIO, McKinsey Portfolio Matrix, Ansoff, and other Capability Assessment Maps; for an in-depth analysis of Microsoft’s hardware outsourcing manufacturing strategy for the XBox 360 gaming consoles, global value chain, capabilities and resources management and tactics. This is looked at in context of how to achieve competitive advantage in the global gaming market focusing on the Xbox gaming consoles.
Inhaltsverzeichnis (Table of Contents)
- INTRODUCTION
- PAPER SCOPE
- CONSUMER ELECTRONICS MARKET ENVIRONMENT DYNAMICS
- STRATEGIC RATIONALE: OUTSOURCING VS. INSOURCING DECISIONS
- EVOLUTION AND IMPACT OF OUTSOURCING ON THE DOMESTIC ELECTRONICS MANUFACTURERS
- DIFFERENCES BETWEEN INSOURCING AND OUTSOURCING APPROACHES
- MICROSOFT HARDWARE OUTSOURCING STRATEGY
- RATIONAL BEHIND THE DECISION
- OUTCOME AND FUTURE MARKET TRENDS
- CONCLUSION
Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)
This paper aims to investigate the strategic rationale behind outsourcing in the domestic electronics industry, exploring its potential for creating sustainable competitive advantage. The paper analyzes outsourcing decisions in relation to insourcing and its connection to a company's strategic capabilities.
- Strategic rationale for outsourcing
- Impact of outsourcing on the domestic electronics industry
- Competitive advantage through outsourcing
- Outsourcing vs. insourcing decisions
- Relationship between outsourcing and strategic capabilities
Zusammenfassung der Kapitel (Chapter Summaries)
- Introduction: Introduces the context of fierce competition in the global electronics industry and the importance of responsiveness and flexibility. It highlights the need for strategic decisions and tactics to achieve profitability and growth, emphasizing the role of competitive advantages in gaining and retaining customers.
- Paper Scope: Outlines the paper's objectives, focusing on analyzing the strategic reasons behind outsourcing, its significance to the domestic electronics industry, and its potential for sustainable competitive advantage. The paper will also examine the rationale behind outsourcing decisions compared to insourcing.
- Consumer Electronics Market Environment Dynamics: Discusses the global consumer electronics market, its value, growth potential, and competitive forces. It analyzes Porter's Five Forces framework, highlighting the bargaining power of buyers and sellers, threats from new entrants and substitutes, and rivalry among existing firms.
- Strategic Rationale: Outsourcing vs. Insourcing Decisions: Explores the strategic rationale behind outsourcing decisions and their impact on a company's competitiveness. It examines the advantages and disadvantages of outsourcing and insourcing, highlighting their implications for a company's strategic capabilities and value chain.
- Evolution and Impact of Outsourcing on the Domestic Electronics Manufacturers: Traces the evolution of outsourcing and its impact on domestic electronics manufacturers. It analyzes the factors driving the shift towards outsourcing, including cost reduction, access to specialized skills, and increased flexibility.
- Differences Between Insourcing and Outsourcing Approaches: Compares and contrasts the approaches of insourcing and outsourcing, outlining their advantages, disadvantages, and suitability for different strategic objectives. It explores the key considerations for making strategic decisions between the two options.
Schlüsselwörter (Keywords)
The primary keywords and focus topics of this paper include strategic management, outsourcing, insourcing, domestic electronics industry, competitive advantage, value chain analysis, global market dynamics, Porter's Five Forces, and Microsoft's hardware outsourcing strategy.
- Quote paper
- Mo Elnadi (Author), 2010, Global Strategic Management - Outsourcing in Domestic Electronics Industry, Munich, GRIN Verlag, https://www.grin.com/document/162124
