Select a real or fictional IT company that presently does not outsource. You are the CEO and must present a business plan to the board of directors to outsource much of the manufacturing and support call center. Please use this strategy when you analyze a case: 1. Identify and write the main issues found discussed in the case (who, what, how, where and when (the critical facts in a case). 2. List all indicators (including stated “problems”) that something is not as expected or as desired. 3. Briefly analyze the issue with theories found in your textbook or other academic materials. Decide which ideas, models, and theories seem useful. Apply these conceptual tools to the situation. As new information is revealed, cycle back to sub steps a and b. 4. Identify the areas that need improvement (use theories from your textbook) o Specify and prioritize the criteria used to choose action alternatives. o Discover or invent feasible action alternatives. o Examine the probable consequences of action alternatives. o Select a course of action. o Design and implementation plan/schedule. o Create a plan for assessing the action to be implemented. 5. Conclusion (every paper should end with a strong conclusion or summary)

Title: Business Strategy for Outsourcing at XYZ IT Company

XYZ IT Company, a leading player in the technology industry, currently handles all aspects of manufacturing and technical support in-house. However, in order to enhance operational efficiency and drive cost savings, a proposal to outsource the manufacturing and support call center functions is being presented to the board of directors. This business plan aims to outline the key issues, analyze the situation using relevant theories and models, identify areas for improvement, propose action alternatives, and conclude with a strong recommendation.

1. Main Issues:
a. Who: XYZ IT Company
b. What: Outsourcing manufacturing and support call center functions
c. How: Analyzing the benefits and drawbacks, assessing feasibility, and developing an implementation plan
d. Where: Within XYZ IT Company’s operations
e. When: Present

2. Indicators of Discrepancy:
a. Rising operational costs and declining profit margins.
b. Manufacturing inefficiencies leading to product quality issues.
c. Insufficient resources and expertise to handle increasing call volume in the support department.
d. Competitors gaining a competitive advantage through outsourcing.
e. Pressure to deliver products and services at a faster pace.

3. Analysis of Issues using Theoretical Framework:
XYZ IT Company can apply the theories and models discussed in the textbooks and academic materials to analyze the proposed outsourcing strategy.

a. Transaction Cost Economics:
This theory states that firms need to weigh the costs and benefits of performing activities internally versus externalizing them. By outsourcing manufacturing and support call center operations, XYZ IT Company can leverage the external market to achieve cost savings through specialized suppliers and economies of scale.

b. Resource-Based View:
This theory emphasizes the importance of leveraging unique resources and capabilities to gain a competitive advantage. By outsourcing non-core activities, XYZ IT Company can focus on its core competencies, such as product development and innovation, thereby enhancing its competitive position in the market.

c. Strategic Alliances and Joint Ventures:
Considering the potential outsourcing to external partners, XYZ IT Company can establish strategic alliances or joint ventures to ensure a collaborative and mutually beneficial relationship. Such partnerships can provide access to new markets, technologies, and expertise while sharing risks and costs.

4. Areas for Improvement:
a. Criteria for Choosing Potential Action Alternatives:
– Cost reduction: Evaluate the cost savings achievable through outsourcing.
– Quality assurance: Ensure that outsourced manufacturing maintains product quality standards.
– Service level agreements: Establish effective metrics to monitor the performance of the outsourced call center and ensure customer satisfaction.

b. Feasible Action Alternatives:
– Selecting a reliable manufacturing partner with a proven track record.
– Collaborating with a reputable outsourcing vendor for call center support services.
– Implementing robust quality control measures and monitoring mechanisms.

c. Evaluating the Consequences:
– Cost savings and improved profitability.
– Enhanced product quality and customer satisfaction.
– Potential risks of dependency on external suppliers.

d. Selected Course of Action:
– Outsource manufacturing to a reputable partner.
– Establish a collaborative outsourcing agreement with a reliable call center service provider.
– Strengthen quality control measures and monitoring mechanisms.

e. Implementation Plan and Schedule:
– Identify and evaluate potential outsourcing partners.
– Develop and negotiate contractual agreements.
– Implement quality control mechanisms and monitor performance.
– Gradually transition manufacturing and support call center operations to external entities.
– Periodically review and assess the effectiveness of the outsourcing strategy.

5. Conclusion:
In conclusion, XYZ IT Company should embrace the outsourcing strategy for manufacturing and support call center functions. By considering transaction cost economics, resource-based view, and strategic alliances theories, the company can achieve cost savings, focus on core competencies, and enhance its competitive advantage. Implementation of robust quality control measures and monitoring mechanisms will be crucial to ensure customer satisfaction and maintain product standards.

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