The aim of this term paper is to analyses to show how offshoring is spread in the markets, which theories exist, which motives companies have referring to chances of offshoring and the risks of offshoring. The paper is underlined by examples to show how offshoring in represented in practice. The conclusion is the tradeoff between risks and chances of the term. The term paper is divided into two parts:
The first part includes the theory of offshoring. A definition is given; the historical development and various market entry strategies are given. First a definition is given, followed by the different types of offshoring. The second chapter deals with the historical development. The third is about the strategies to entry into new markets. Companies have different possibilities like the export or the joint venture. The last part of the first part discusses the question which theories are important for the International Business. The second part of the term paper is about the different motives and risks which are relevant for companies with the idea to go offshore. Chapter four brings the motives of offshoring into focus. Companies gain advantages if they go offshore. The fifth chapter is about the risks. Different reasons which could be negative are mentioned. The next chapter deals with the criteria for the right target country, followed by the most popular target countries like China and India in chapter 7. By giving examples of companies, the theory of the term paper is translated to practical cases. In the last chapter the conclusion is given by weighing the risks and the chances of offshoring.
Table of Contents
Introduction: Why going global?
Definition
1 Different types of Offshoring
1.1 Farshoring vs. Nearshoring
1.2 Offshoring vs. Onshoring
1.3 Offshoring vs. Outsourcing
2 Historical development
3 Strategies for an entry into new markets
3.1 Direct investment and transaction strategies
3.1.1 Export
3.1.2 Licensing
3.1.3 Franchising
3.1.4 Joint Venture
3.1.5 Foreign Subsidiaries
3.2 Theoretical approaches of international corporate activities
3.2.1. The Product Life Cycle by Vernon
3.2.3 The eclectic framework by J. H. Dunning
3.3 Timing strategies
3.3.1 The diversification strategy
3.3.2 The concentration strategy
4 Motives for offshoring
4.1 Cost saving
4.1.1 Personnel costs
4.1.2 Location costs
4.1.3 Transportation costs
4.1.4 Cost reduction by Economies of Scale
4.1.5 Bargaining Power
4.2 Market proximity
4.3 Access to Raw Materials
5 Risks of offshoring
5.1 Loss of quality
5.2 Unqualified foreign employees
5.3 Image risk
5.4 Exchange rate risk
6 Criteria for the right target country
7 The most popular target countries
7.1 China
7.2 India
8 Examples
8.1 Nokia
8.2 Steiff
9 Conclusion
Bibliography
- Quote paper
- Mehrssa Jahanpanah (Author), Maximilian Hoffmann (Author), 2014, Offshoring. Strategies, Motives and Risks, Munich, GRIN Verlag, https://www.grin.com/document/272770
