Strategic outsourcing is not an oxymoron

Strategic outsourcing is not an oxymoron

The term “strategic outsourcing” may sound like an oxymoron. Traditional dogma of outsourcing calls for companies to sequester strategic capabilities in-house and only source non-core or commoditized capabilities from 3rd parties.  The situation becomes more complex in a dynamic market context since (i) what may be deemed a core competency today may become peripheral tomorrow and (ii) firms may increasingly find a deficit of in-house critical capabilities and know-how as they react to new markets and consumer changes. One key implication is that outsourcing must recognize and anticipate the underlying industry structural trends (consumer, technology, macro-economic) that can unexpectedly change a firm’s value chain capabilities landscape.

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