Assignment on Sourcing Models

There are a number of factors that influence the position of the company based on the sourcing model. These factors are labor costs, market responsiveness, use of technology and involvement in the supply chain. The role of labor costs is critical for companies as lower labor costs allow keeping the product prices lower. Consequently, low prices help in exceeding customers’ expectations that the products are available at moderate prices as the purchases occur frequently. Large-sized companies are highly supported by the technological influences where the fundamental influence is from the highly networked and flexible suppliers.

Technology allows sharing information about shipping and production, capturing information about trends. Thus, real-time communication in outsourcing throughout the supply chain can be facilitated with the technology. It is due to constant communication through the IT system that retailers, manufacturing facilities and suppliers can be connected to each other.

The technology also affects logistics programs such as air freight and expedited customs clearance. This has also led to an increase in competition as those firms that used to export only previously are now able to provide end-to-end services of design, manufacturing, and logistics. Such factors have widely changed the retail business operations in light of globalization in Australia. Moreover, Market responsiveness is inseparable in the retail industry.

The ability to respond to the market needs however depends on the firms as some respond quickly to it while others do not. The firms that are able to respond quickly emerge as the trendsetters. However, market responsiveness not only means to introduce the new products based on trends but also to determine the right quantity of products that must be manufactured and distributed to stores

Market responsiveness is very imperative in the retail industry. The ability to respond to the market needs however depends on the firms as some respond quickly to it while others do not. The firms that are able to respond quickly emerge as the trendsetters. However, market responsiveness not only means introducing the new fashion products based on trends but also to determine the right quantity of products that must be manufactured and distributed to stores.

Factors influencing the development of outsourcing as a tool for managing retail trade networks.