Which Is The Best Example Of Outsourcing? Lessons for Businesses
by Mashum Mollah Business Published on: 19 October 2021 Last Updated on: 20 May 2025
Outsourcing. One of the most common terms in the business landscape! And trust me! It can be effective only if you know how to do it properly.
No one can deny that the human progress we are experiencing today in business is directly linked to the division of Labor. This is the reason why outsourcing has become so common.
The world finally started to realise its contribution in 1989. By the time the 20th century was about to end, strategy had become an integral part of business strategy.
Even today, outsourcing is in high demand in countries like the USA, Japan, and Western Europe! On the contrary, other regions like Asia and the Former Soviet Union are currently experiencing slow yet steady growth of outsourcing in the business landscape.
What if I ask you a simple question: Which is the best example of Outsourcing? Don’t worry! I will give you four options to choose from:
Option 1: A US shoe company opens a factory in China and hires Chinese workers to make shoes.
Option 2: A US shoe company opens a factory in the US and hires US workers to make shoes.
Option 3: A US shoe company opens a factory in the US and hires Chinese workers to make shoes.
Option 4: A Chinese shoe company opens a factory in China and hires Chinese workers to make shoes.
Do you have your answer ready? Then Hold on! Keep reading this article to find out if you are right!
First! Let’s Learn What Global Outsourcing Is All About.
In order to know which is the best example of outsourcing, don’t you think a global outsourcing definition is needed? Well, precisely outsourcing is “a business strategy where an organization recruits third parties for assigning specific work responsibilities.” For instance, you might be looking for find a personal assistant online to aid the smooth running of your business, or you might be looking to oursource data entry tasks to a third party.
The practice of outsourcing went on hype in the 1980s after beginning in the 1970s. Most of multinational companies around the world are surviving on Global outsourcing services and are performing pretty well. That is why it is a little tricky to tell which is the best example of outsourcing specifically.
But worry not, as we have already given the answer, we will be explaining the rationale behind it.
Which Is The Best Example Of Outsourcing – Details Explanation Of the Answer
Now it’s time to answer the question I asked at the beginning of this article: Which is the best example of outsourcing?
And the answer would be: Option 1: A US shoe company opens a factory in China and hires Chinese workers to make shoes.
Why? Well, if you take a look at the definition of outsourcing, you will see it clearly aligns with the example here!
Here’s how!
Firstly, the US company has transferred its operations. They are not operating in the US anymore; they have relocated to China. This is also known as Global Recruiting Service, as the company has opened its unit in overseas destinations and hires offshore employees.
Secondly, the company is hiring chinese workers in their workforce, completely separate from their American employee base.
Thirdly, there is a scope for cost savings. The new location in China would allow the US company to take advantage of lower labor costs.
In conclusion, the example strongly illustrates how a company can easily outsource their key operation often for better cost or other strategic reasons.
The next question is, “why would the US shoe company do that? The two main aims of outsourcing are cutting labor costs and optimizing the overall business performance.
Recruiting onshore employees, especially in a country like the U.S.A, would incur much higher costs. Hence, global outsourcing services is the only option. So the query “Which is the best example of Outsourcing?” is well justified.
So the query “Which is the best example of Outsourcing?” is well justified.
What Are The Benefits Of Global Outsourcing Services?
Whether you are looking for a finance professional, a project manager, a healthcare virtual assistant, or any other sort of professional. Global outsourcing services could be the ideal solution.
Global Outsourcing services have tons of benefits. Let’s check them out without staying limited to which is the best example of outsourcing.
- Global Outsourcing Solutions reduce costs
- With outsourcing, you can easily leverage business outlook
- Make the best use of core internal resources for critical activities
- Can run the business 24*7
- Increase in profits
Are There Any Negative Sides In Global Outsourcing Services?
Which is the best example of outsourcing? – even the best example also undergoes certain negative experiences. While it brings a plethora of prospects to the companies, the global outsourcing services also cause enough pain. Following are the disadvantages of outsourcing services:
- Causes high competition in the domestic market
- Employee turnover increases, and employee loyalty decreases
- Unemployment rises in own country
Is Remote Staffing Different From Global Outsourcing Services?
There is a significant difference between remote staffing and outsourcing. While outsourcing means hiring overseas employees for offshore business units, remote staffing is working from remote places. However, remote outsourcing means hiring offshore employees who would work from remote locations for a company.
Top Global Outsourcing Companies In The World
Which is the best example of outsourcing in the world? Frankly speaking, a majority of the employment industry in the world is running based on global outsourcing solutions. Sometimes it creates competitive complications in the International market.
Some of the best outsourcing companies in the world are as follows:
1. Wipro
Involved in Artificial Intelligence, digital marketing, customer service management, cloud & infrastructure. This company outsources from various locations, which include:
- India
- The Philippines,
- Germany,
- Canada,
- Australia and other regions
- The United States
2. IBM
Engaged In Talent Acquisition, Staff Augmentation, Financial And Consulting Services, Financial Planning and Analysis. They have been known for outsourcing from India and various other Asian locations.
This helps them to reduce the overall costs while acquiring the best talents.
3. Accenture
Outsourcing includes HR services, healthcare utilization management, support, and procurement operations. They mainly outsource experts from India and the Philippines.
4. Infosys
Outsource customer care, recruitment, supplier relationship management, and payroll outsourcing. They mainly outsource from India. However, they have a global presence in 14 countries, which include:
- Poland,
- The Czech Republic,
- The Netherlands,
- South Africa,
- Ireland,
- China,
- Brazil,
- Mexico,
- Costa Rica,
- The United States,
- Puerto Rico,
- The Philippines,
- Singapore, and
- Australia.
5. Alibaba
Alibaba. China’s eBay outsources mainly the website development and design work. While based in China, they often outsource their business for various reasons, such as talent scarcity or lack of access to specific expertise.
6. Nike
Nike’s product manufacturing and design are mainly outsourced. They primarily outsource in Asia, such as China, Vietnam, Indonesia, and Thailand.
Other than these, they also have their outsourcing from countries like Japan, the Philippines, and even Italy.
They do not own any of their factories. Instead, they work based on contracts with third party entities to produce their products.
Frequently Asked Questions (FAQ)
Q1. Which Is The Best Example Of Outsourcing Quizlet?
The best example of outsourcing is when a US shoe company opens a factory in China and hires Chinese workers to make shoes.
Q2. What Is The Top Reason For Global Outsourcing Of IT Services?
The top reason for global outsourcing of IT services is Flexibility. More outsourcing of IT services means flexible use of resources and increasing business productivity.
Q3. Is The Global Outsourcing Market Growing?
Indeed, the global outsourcing market is expanding at a faster rate. By 2025, it is expected to touch USD 397.6 billion. With the development of cloud services, IT sourcing is becoming more widespread.
Q4. After Outsourcing To Global Suppliers, __________ Is Not Simple.
The correct answer to this question is Back-shoring. Because, after the outsourcing is done, implementation of back shoring is challenging.
Q5. Is The Global Outsourcing Definition Applicable To Shoe Brand Puma?
The German multinational shoe specialist company Puma outsources most of its manufacturing. Appeximayly 90% of its production occurs in the Far Eastern countries. But according to the annual reports and sustainability reports of PUMA, this production outsourcing is fatal to the environment. It affects the value chain of Puma heavily.
The Final View
Outsourcing is something that is inevitable with globalization. Hiring domestic employees makes multinational companies incur huge amounts of cost. This is where the logic of Outsourcing lies. As a result, the answer to which is the best example of outsourcing in the US shoe company opening a factory in China and hiring Chinese workers.
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