Company Orientation of the Core Business Throught Implementation of Outsourcing

Mirjana Nedovic Cabarkapa () and Vlasta Sibalic ()
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Mirjana Nedovic Cabarkapa: Podravka
Vlasta Sibalic: Fina

Business Logistics in Modern Management, 2010, vol. 10, 71-91

Abstract: By responding on the ever more demanding consumer needs as well as on stronger market sophistication and market sensitivity on quality of products and services, modern enterprises are forced to react through increased specialisation of each segment of business activities. This work elaborates outsourcing of logistic services and benefits of outsourcing for companies which use that method. Companies should keep check on quality of products and services as well as on the analysis of sales results. They should compare own performances with competitors but also within the entire market performances. Furthermore, the companies have to continuously monitor and redefine their core business activities and strategically select their core business activities i.e. select the ones which achieve the best results in comparison with the competition and focus the company's potential on further improvement of such activities. All other activities should be left to other companies which will be able to conduct them better and, most probably, more cheaply, i.e. one should use outsourcing services.Therefore, outsourcing activities, which are not part of the company's core business, enable the company to focus more on its basic competencies on one side, and, on the other side, create new opportunities for service providers that offer their expertise in particular business processes. Companies that provide such services can take over secondary business activities and offer them to other participants in the supply chain, with the purpose of reducing their overall logistical costs, which further results in better efficiency and effectiveness of business dealings. The current trend on the global market is the reduction of logistical company expenses by using the capacities of other companies that specialize in business activities for which the own company has no competence or capacities.

Keywords: logistics; outsourcing; efficiency; business optimization (search for similar items in EconPapers)
Date: 2010
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