Discussion – Quality vs. Low Cost

Discussion – Quality vs. Low Cost

As a business grows, one of the major decisions that managers have to make is whether to outsource their supply chain. Outsourcing the supply chain exposes a business to some benefits as well as limitations. Factors in the supply chain can affect either the quality or the cost of the business’s products, or in some cases, both.

One element of the supply chain that would influence this decision is the trade policies. There are declining trade and investment barriers that would increase the costs of production overseas for American businesses. For instance, if the cost of production is cheaper in China, a business will benefit from outsourcing its production to China. This is a decision that increases the company’s cost savings. Trade barriers would make it harder for the business to manage the globalized supply chain. However, the reduced costs of international trade are making outsourcing much easier. Nonetheless, the business also has to consider the quality aspect of their chosen aspect of production. Just like the cost, the quality of production differs from one global market to another. Differences in technology advancement are one of the reasons for the differences in quality (Hill & Hult, 2017). For instance, Asian countries such as Japan may be good at technology products but not the best market for other products (Steger, 2017). Therefore, businesses have to make the globalization decision wisely while compromising between cost and quality. Globalization is only an advantage when the business is able to make the right decision.

References

Hill, C., & Hult, T., (2017). Global Business Today Asia-Pacific Perspective. McGraw-Hill Education.

Steger, M. B. (2017). Globalization: A very short introduction (Vol. 86). Oxford University Press.

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For this discussion, consider the “quality vs. low cost” issues a U.S. company might face in outsourcing its supply chain (including manufacturing) overseas. Respond to the following:

Discussion – Quality vs. Low Cost

Identify the elements of globalization discussed in Chapter 1 that support such an outsourcing decision.
Support your position with one additional resource from either globalEDGE or the Capella Library.
You must use proper APA references and in-text citations to identify both the textbook and your additional resource.

Response Guidelines
Respond to two other learners, identifying any cultural or global economic variables that might affect such a decision.

Resources
Discussion Participation Scoring Guide.
globalEDGE.
APA Style and Format.