U3 AOS 2 CH3J FElix Flashcards
Global sourcing of inputs(v.)=
-Global sourcing of inputs(v.)=A business [acquiring raw materials and resources] [from overseas suppliers.]
Use this definition=
5D)Q15)Global sourcing of inputs(v.) involves a business acquiring raw materials and resources from overseas suppliers (can say outside of the country externally too).1
When should Global sourcing of inputs be considered
-Global sourcing of inputs can be considered if=
1)The raw material you need to manufacture only comes from overseas.
2)The raw material you require is cheaper to source from overseas rather than locally.
-tariff(n.)=
[Taxes] that must be [paid] to a [government] for [particular imports and exports.]
-Free trade(n.)=
The [absence] of [government protections] to [restrict goods being imported] into a country.
-Quota(n.)=
The [limitations, in international trade,] on the [amount] of a [particular product] that can be [imported and exported into/from a country], which are [usually set by a government.]
Strengths of sourcing inputs globally
+Access to materials thar are that not readily occurring in the domestic country.
+Ability to source higher quality materials from overseas to improve the end product quality.
+Access to cheaper materials
+Companies can specialise in manufacturing or production of the service, rather than sourcing the raw materials.
Limitations of sourcing inputs globally
-Can lengthen delivery/supply times.
-there is a risk of damage as shipping distance increases.
-Language barriers in dealing with suppliers.
-The supplier’s country ethical, environmental, and legal standards may be different, and in some cases, it may damage the company’s reputation by association.
-Companies may be exposed to changes in exchange rates, tariffs, or quotas.
Overseas manufacture(n.)=
-Overseas manufacture(n.)=A [business producing] [goods or services] [outside] of the [country] where its [headquarters] are located.
Use this definition=
(textbook)Overseas manufacture(n.) involves a business producing goods or services outside of the country where its headquarters are located.1
When would you consider overseas manufacture
-Another consideration may be to locate manufacturing closer to the raw materials, or to avoid tariff or quota barriers to export markets.
-You would consider manufacturing your products in places with low minimum wages rather than high minimum wage countries like Australia.
Strengths of overseas manufacture
+Access to cheaper labour rates and cheaper costs of production.
+Access to a large pool of employees or skill sets that aren’t available in the country.
+Works well with large volumes of simple assembly manufacture where delivery times are not too important.
+Access to new export markets, as you may be able to beat tariff or quota walls.
Limitations of overseas manufacture
-Lost jobs in domestic manufacturing.(e.g. Australia no longer has a car manufacturing industry in Australia because it can’t be competitive with overseas.)
-Language barriers in dealing with overseas manufacturing employees.
-Concern for business association with terms such as “sweatshop labour” if corporate social responsibility, environmental, and legal standards are different in the overseas country.
Global outsourcing(v.)=
-Global outsourcing(v.)=[transferring specific business activities] to an [external business] in an [overseas country.]
-Outsourcing(v.)=The transfer of specific activities to an external business.
Use this definition=
Q5)5D)Global outsourcing(v.) involves transferring specific business activities to an external business in an overseas country.
Side note=
By doing so, a business often gains the expertise of highly-skilled employees who are able to efficiently complete business tasks, therefore minimising the amount of time and resources a business uses in its activities.
Strengths of Global outsourcing
+access to cheaper labour rates.
+The business is not directly responsible for non-core services, employees, and their entitlements.(and their wages)
+Works well with IT based services, where internet and phone developments mean that employees could be based anywhere in the world.
Limitations of Global outsourcing
-Reduced control over the other business’s activities, and their actions may reflect negatively on your reputation.
-Language barriers in dealing with overseas businesses sometimes translates into customer frustration(Telstra’s call services)
-Reliance on internet connections
-The supplier country’s corporate social responsibility and legal standards may be different.
-May cause unemployment in the domestic country through the loss of job.
