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Outsourcing strategies: opportunities and risks

Brian Leavy (AIB Professor of Strategic Management at Dublin City University Business School and a contributing editor of Strategy & Leadership (brian.leavy@dcu.ie). He has published three books – Strategy and Leadership (co‐authored with David Wilson); Strategy and General Management (co‐edited with James S. Walsh); and Key Processes in Strategy.)

Strategy & Leadership

ISSN: 1087-8572

Article publication date: 1 December 2004

Abstract

Managers in developed countries are increasingly interested in outsourcing as a potential source of competitiveness and value creation. There has been a growing awareness of the potential of outsourcing to support a range of strategies beyond that of lower cost. This article makes corporate strategists familiar with four of the most promising opportunities for using outsourcing strategies – focus, scale without mass, disruptive innovation and strategic repositioning. While assessing the potential of these opportunities in specific corporate situations, strategists also need to look at two of the most significant associated risks – the risk of losing skills that could be key to competing in the future, and the risk of turning to outsourcing at the wrong stage in an industry’s evolution. The article widens managers’ views of the strategic alternatives that outsourcing can be used to support, while making managers aware of the main risks to be weighed in the balance. Case examples of companies that have successfully attempted the four types of outsourcing are examined.

Keywords

Citation

Leavy, B. (2004), "Outsourcing strategies: opportunities and risks", Strategy & Leadership, Vol. 32 No. 6, pp. 20-25. https://doi.org/10.1108/10878570410568875

Publisher

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Emerald Group Publishing Limited

Copyright © 2004, Emerald Group Publishing Limited