Determinants Of Competitive Advantage, Difference Between Fundamental And Dynamic View, Business Strategy

Describe the determinants of competitive advantage.
Recognise the difference between the fundamental view and the dynamic view of competitive advantage.
Develop a business strategy based on a comprehensive situational analysi

External Issues

In today’s business world, strategic management is considered as one of the major aspects for the success of the business organizations. Strategic business management is considered as a major process that includes planning, monitoring, analyzing and assessing the necessary aspects for the companies that are required for the companies to meet their goals and objectives (Wheelen et al. 2017). The presence of various strategies can be seen in the process of strategic business management and one of them is job off shoring. Job offshoring is considered as the process to relocate the business processes of the companies to another location like manufacturing, supporting, processing, accounting and others (Doz 2017). This report takes into consideration the major aspects of job offshoring. More specifically, the aim of the report is to analyze different aspects of job offshoring of Price Waterhouse Cooper (PWC).

It needs to be mentioned that there are certain external issues that lead to the decision of PWC to move their jobs offshore.  Lower operational and cost of labor can be considered as a major reason for PWC’s job offshoring. The cost of operations and labors makes a large part in the expenses of PWC and the aim of the company is to reduce these costs with the aim to increase profitability. For this reason, the company adopts the strategy to offshore their jobs as it provides the company with the opportunity to reduce both the costs of operation and labor (Da Silveira 2014). After that, the aim of the companies like PWC is to tap into the global knowledge base in order to bring efficiency in their operations. Adoption of the strategy of job offshoring provides the company with the required access to the world class capabilities. Thus, it can be considered as a major external factor. The scarcity of required resources in a particular region is considered as one major reason for job offshoring and there is not any exception of this fact in case of PWC. One major motive of the company for job offshoring is to use the available resources of another region (Egger, Kreickemeier and Wrona 2015). Mitigation of risk is another major reason for PWC behind the adoption of the strategy to offshore the jobs. PWC can avoid certain portion of their business risk by offshoring their jobs to another region.

Apart from the external factors, the presence of certain internal factors can be seen in the business operations of PWC that lead the company towards the adoption of the strategy to offshore their jobs. The absence or lack of specialist experts is one major issues to offshore the jobs by PWC. The projects of PWC with complex processes demand the expertise that may not be present in the company. At the same time, the requirement may not be the full-time requirements. In this situation, offshore of jobs is an intelligent alternative way to hire (Gupta, Ganguli and Ponnam 2015). After that, certain smaller parts of the high-value projects of PWC need the intervention of the specialists. As these needs are irregular, it is not profitable for the company to hire full-time employees. In this kind of situation, offshore the job is a major alternative for PWC. Saving the time of the managements is another major issue for PWC to adopt the strategy to offshore the jobs. To PWC, time is money when their management involves in the daily routine jobs that consist of the secondary work of the company. Thus, with the adoption of the strategy of outsourcing, the management gets the option for concentrating the key focus areas of their business operations (Brändle and Koch 2014). The presence of high business risk is another major internal issue for that leads to the adoption of the strategy to offshore the jobs. PWC can ensure the proper handling of their major risk areas by offshoring them.  

Internal Issues

 In PWC, the presence of certain stakeholders can be seen who are impacted by the decision of the company to adopt the strategy to offshore the jobs. They are shown bwlow:

Company’s Management Team: The above discussion indicates towards the fact that the management of PWC become able in focusing on the crucial business areas as they do not have to manage the secondary business operations. For this reason, the management of PWC becomes able in concentrating the specific business areas that ensure the growth of the business. In this context, it needs to be mentioned that the management of PWC become able in include more advanced technology with the process of job off shoring. At the same time, PWC become majorly advantageous from the offshoring of their accounting related jobs. It leads to the generation of more productive results for the company (Fine 2013).  

 Customers: The earlier discussion also shows that PWC offshore the crucial parts of their projects that need specialist expertise. As a result of this, the customers of PWC receive their projects that are completed by highly talented experts (Grappi, Romani and Bagozzi 2013).

Employees: PWC involves in the process of offshoring parts of their jobs and this aspect reduces the extra amount of work burden from their employees. In the presence of this aspect, the employees of PWC become more efficient.

It needs to be mentioned that PWC can obtain certain competitive advantages in moving either expanding offshore and/or offshore some jobs; and they are discussed below:

• It can be seen from the earlier discussion that PWC can offshore some parts of their projects that need expertise of the specialists. With the help of this strategy, PWC has the option o bring new innovation in the market thorough the process of job offshoring. This particular process will be majorly helpful for PWC to beat their competitors in the aspects of new technological innovation (Mohiuddin and Su 2013).
• After that, with the strategy of job offshoring, PWC has the option to make partnership with experienced companies outside the region or the country. This particular collaboration with the catalyst companies will help PWC in swift entry into the new markets in less time. In this way, PWC can beat their competitors for entering into new market.
• In the presence of the strategy of job offshoring, PWC becomes able in the reduction of investment in non-critical functions and this particular aspect provides the company with the flexibility for acting with less financial burden; and they become able in responding opportunistically in the new markets. This aspect provides the company with the required competitive advantage (Schniederjans, Schniederjans and Schniederjans 2015).
• One major advantage of job offshoring is that the business organizations become able in focusing on their core competencies and they can develop those skills that can add value to their customers. PWC can gain the required competitive advantage from this particular aspect.

  Every business strategy has certain issues and there is not any exception of this fact in case of the strategy of job offshoring; they are discussed below:

• In the process of job offshore, the managements of the companies have the expectation that this process will lead to the cost saving for their business. However, in most of the cases, it can be seen that the companies failed in savings cost in job offshoring process due to go up in the business processes. This is a major risk in this strategy (Manning 2014).
• Under the process of job offshoring, business organizations face the risk of the security breaks of the intellectual property. For this reason, the companies are needed to address the privacy concerns.
• High level of competition can be seen in the process of job offshoring. For this reason, this particular aspect can lead to the turnover of the key personnel.
• The failure of the vendors to deliver the expected job can be considered as another major risk in the process of job offshoring. These are the major risks and issue in this strategy that need to be considered (Tate 2014).

Strategic Implications: It can be seen from the above discussion that the strategy of job offsoring has certain positives and negatives and PWC needs to consider both the positive as well as negative impact of the adoption of the strategy of job offshoring. PWC can be majorly beneficial from job offshoring as they will be able to get specialist expert for their jobs. At the same time, the needs to consider the risks related to this strategy like the breach of security, loss in revenue and others.

Conclusion

It can be seen from the above discussion that there are both the external as well as internal factors that affect the decision of the companies in adopting the strategies to offshore the jobs. All these aspects are needed to consider for the adoption of the strategy of job offshoring. The above discussion also shows that there are certain stakeholders that can be affected with the decision of the companies for job offshoring. It can be seen from the above discussion that the strategy of job offshoring provides the companies with the required competitive advantage. Lastly, the companies are needed to consider the issue in this particular strategy.

References

Brändle, T. and Koch, A., 2014. Offshoring and outsourcing potentials of jobs: Evidence from German micro-level data(No. 110). IAW-Diskussionspapiere.

Da Silveira, G.J., 2014. An empirical analysis of manufacturing competitive factors and offshoring. International Journal of Production Economics, 150, pp.163-173.

Doz, Y.L., 2017. Strategic management in multinational companies. In International Business (pp. 229-248). Routledge.

Egger, H., Kreickemeier, U. and Wrona, J., 2015. Offshoring domestic jobs. Journal of International Economics, 97(1), pp.112-125.

Fine, C., 2013. Intelli?Sourcing to Replace Offshoring as Supply Chain Transparency Increases. Journal of Supply Chain Management, 49(2), pp.6-7.

Grappi, S., Romani, S. and Bagozzi, R.P., 2013. The effects of company offshoring strategies on consumer responses. Journal of the Academy of Marketing Science, 41(6), pp.683-704.

Gupta, M., Ganguli, S. and Ponnam, A., 2015. Factors affecting employee engagement in India: a study on offshoring of financial services. The Qualitative Report, 20(4), pp.498-515.

Manning, S., 2014. Mitigate, tolerate or relocate? Offshoring challenges, strategic imperatives and resource constraints. Journal of World Business, 49(4), pp.522-535.

Mohiuddin, M. and Su, Z., 2013. Manufacturing small and medium size enterprise’s offshore outsourcing and competitive advantage: An exploratory study on Canadian offshoring manufacturing SMEs. Journal of Applied Business Research, 29(4), pp.1111-1130.

Schniederjans, M.J., Schniederjans, A.M. and Schniederjans, D.G., 2015. Outsourcing and insourcing in an international context. Routledge.

Tate, W.L., 2014. Offshoring and reshoring: US insights and research challenges. Journal of Purchasing and Supply Management, 20(1), pp.66-68.  

Wheelen, T.L., Hunger, J.D., Hoffman, A.N. and Bamford, C.E., 2017. Strategic management and business policy. pearson.