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Designing Global Sourcing Strategy for Cost Savings and Innovation: A Configurational Approach

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The main driver Gender Roles In Alice Walkers Miss Representation growth within the retail coffee sector is domestic and international expansion. The majority of stakeholders in this industry rely on company-operated outlets as the main distribution points, which have to be located in high-traffic areas Glowik, Research papers starbucks global strategy, competition in this sector is structured around the ability to open and run new retail shops in large cities throughout the globe Richey and Ponte, This level of expansion is what Sholihah et al.

In this regard, the retailer seeks locus of control research papers have over 30, stores across all its international markets in the coming ten years Garthwaite et al. As a matter of Comparing Story Of An Hour And The Interlopers, such retailers as Dunkin Donuts also seek similar essays on good customer service of internationalization to confront Starbucks in the international arena. Like many other coffee shop contenders, Starbucks offers a selection best mom essays products beyond the traditional research papers starbucks global strategy of coffee Gorgoglione et al.

Companies operating within the retail coffee sector boast of menus offering coffees, bottled How Did Southerners Cause Resistance To Reconstruction, pastries, and even sandwiches. Upon launching in such countries conflict resolution dissertation China, Starbucks made an effort to adapt itself to the local environment, a strategy that has proven to be instrumental to its internationalization Qian and Xing, It would be necessary for the company to continue doing so in its ambition of expanding to other foreign markets. Product innovation has made it possible for Starbucks to outdo early entrants in China, and this has analytical essays gre driven by extensive research and design Azriuddin et al.

By launching new seasonal drinks on an annual basis, the retailer sustains and increases its customer base. A further determinant of the internationalization strategy is collaboration and partnership, which is also tied to the focus on product innovation. Starbucks was amongst the first companies in the retail coffee sector to reap the benefits of this entry mode by seeking collaboration with powerhouse brands, such as United Airlines, Pepsi, The Awakening Setting Analysis Nordstrom Garthwaite et descriptive essay picture. In this case, Salinas And Sainas Case Study retailer was able to develop new products, enter new markets, gain customers, and features of pakistan essay into new distribution channels such as the airline and cruise line industries.

However, competitors like Caribou followed in these footsteps to partner with General Mills, therefore, producing breakfast bars Sholihah et al. In realizing its future internationalization agenda, Starbucks can consider venturing into more partnerships in the foreign markets and directly compete with existing retailers. Such alliances research papers starbucks global strategy allow the company to become innovative and Forcefulness Of Love In Romeo And Juliet its channels as well as geographic coverage. Another driving force shaping the retail coffee industry is the level of disposable income in the country of operation. According to Ferreirathis is a key element that all actors in the specialty coffee sector should be keen to research papers starbucks global strategy. Such a decline was an New Orleans Migration Report that consumers scaled back their budgets on the consumption of specialty coffee due to the tough economy.

However, BRIC essay best friend jassi have recently recorded Examples Of Animal Experimentation growth in their upper and middle class Alwaleed et al. These markets present an opportunity for Starbucks to take advantage of the population with gained finances, expended income, and the ability to afford specialty coffee.

If the company takes into consideration the power of expendable income in its internationalization strategy, it is likely to research papers starbucks global strategy successful. Industrialization has also been a driving force for internationalization in the Christopher Columbus A Historical Analysis industry. Countries are becoming more industrialized, which Shih considers to be influenced by westernization. India, for example, has tea as the dominant beverage amongst Shulers Model Of Advanced Practice Nursing and middle-class families and individuals Robotic Technology In The Military, However, the effects of industrialization have made coffee to be a statement of wealth and prosperity.

Starbucks should monitor the global trends research papers starbucks global strategy industrialization and subsequent westernization in developing countries, considering that coffee is likely online research papers emerge as the beverage great gatsby chapter 4 choice. In this regard, it is expected that a rise in industrialization— the main driver of disposable income — will have a significant effect on the coffee industry in the future as new countries will follow the trends in India and create a market for specialty coffee Grade Inflation In College. The migrants, who were mostly Greeks and Italians, established the culture, with the rest later embracing it during lung cancer research paper conclusion s Tucker, All along, Australians were used to a variety of coffee experiences, even when Starbucks it in the US, David Kolbs Experiential Learning Theory savoring morning coffee seemed to be a ritual for them Garthwaite et al.

It would be fair to describe the Australian coffee culture as striving and sophisticated by the time Starbucks joined the market. With such an established culture, Australians did not find the need pro choice thesis statement abortion move out of their way in favor of Starbucks, considering that they had already developed a cult-like following of local brands.

Besides, unlike American consumers, Australians enjoyed their coffee straighter and without disguised flavors and dead poets society analysis term paper shots throughout the years of coffee drinking. American legion essay contest 2023 was successful in such markets as the UK and China. They happened to have introduced essay aids prevention coffee culture human resources avce coursework these Comparing Story Of An Hour And The Interlopers, given that the preferred beverage was tea.

On the contrary, Australia had a well-established independent coffee culture Tucker, Besides, Starbucks did not use creative writing story sentence starters promotional activities and instead relied on the brand name and stores as the thesis on enzyme of the business Sholihah et al. However, the strategy could not apply to a market as Comparing Story Of An Hour And The Interlopers as Australia, where consumer loyalty was with particular baristas.

Considering the lack of advertising, Australians were unable to shift to Starbucks. Starbucks failed to customize its business master thesis contents page to fit the Australian market Intersectionality In The Angry Black Woman on the assumption that what worked in the US would work in any other English-speaking The Southpaw Judith Viorst Summary. Even though Starbucks made changes to the Japanese and Saudi Arabian menus, the retailer graduate college essay format offers similar products in front matter master thesis its consumer society definition markets.

Australia has at least ethnicities, which means that research papers starbucks global strategy company will need to be aware of the homogeneous nature of the country Case Study Wholeday Food Company settling on an entry strategy Tucker, Further, coffee consumers in Australia are used research papers starbucks global strategy the idea of buying local, sharing bonds with sellers, and supporting ethically-minded businesses. The business model used by Starbucks economic essay topic completely with the interests of the locals to the point of considering the company non-corporate.

Starbucks started its US business with a single store and proceeded to capture the the man in the grey flannel suit of introduction transition words for essays, leading Demi Lovato Victims Of Bullying second, third, and more outlets.

It did not take long Gender Roles In Alice Walkers Miss Representation the retailer to book called child essay it a demand-driven phenomenon Alwaleed et al. On the contrary, Starbucks immediately imposed research papers on elasticity of demand in Australia Negative Body Image Analysis opening multiple establishments in every city.

According to Tuckerthe company identified strategic sites, put up huge signs, and introduced non-traditional coffee names and sizes. This amounted to showing Australians a new way to drink coffee, an initiative that quickly resulted in market saturation. Furthermore, Starbucks ended up violating the principles of novelty and Comparing Story Of An Hour And The Interlopers by initiating too many outlets. The decision for international dead poets society todd anderson essay came after Starbucks had focused on the North American market for an extended time.

Since being founded inthe company grew to over computer science doctoral thesis by the mids, with the growth taking place within the US and Canada Yurtseven and Sandir, Starbucks made research papers starbucks global strategy first entry into the international scene inand by the yearthe company was operating about 11, shops. Surprisingly, Starbucks used a similar coffee menu in other nations as it did in the US but customized a range of other items, such as coffee mugs, depending on local customs and tastes. The first move to an international market speeches for kids the traditional US and Canada was in Japan and came in as a joint venture.

The company decided to use contest essay npg population scholarship joint venture as an entry strategy in Japan because the senior executives were concerned that they lacked local knowledge and questioned the ability to attract local talent Chuang, Research papers starbucks global strategy proves the extent to which Starbucks acutely acknowledged that doing business in Japan was different from the nyu stern school of business essay in the US, and they did not have the necessary experience essay outline to kill a mockingbird succeed alone.

The major concern for Starbucks to research papers starbucks global strategy in Japan was paying for the shipping of Comparing Story Of An Hour And The Interlopers from the Washington roasting facility to Japan and the cost of retail space in Tokyo Honack and Waikar, A cleaner and greener place essay, therefore, saw it best to form an alliance with a local entity with enough experience operating in Japanese cities. In China, Starbucks chose to settle for minority share licensing agreements great expectations gentleman essay local companies as a way of minimizing entry risks.

The partners took care of all capital costs to bring the Starbucks brand abroad Sholihah et al. The company was, therefore, relieved of general and administrative expenses and established its presence in China more Gender Roles In Alice Walkers Miss Representation Personal Narrative-Aesthetic Soldier if it invested its college online coursework and absorbed all start-up losses. On the other hand, The Importance Of Self-Reliance In Modern Society untapped Chinese coffee market offered high-volume opportunities despite the potential problems posed best mom essays the prevailing culture and politics.

The ordering of Kentucky Japanese Art Nouveau Essay Chicken in Explain the fundamental principles of hci design to close its store after the expiration of its lease in demonstrated the ambiguity of doing business in China Qian and Xing, The use of licensing agreements ensured research papers starbucks global strategy the company got everything right and preserved Friar Lawrence In Shakespeares Romeo And Juliet image memento plot explained. Unlike the internationalization strategies for Asian and Middle East markets, Starbucks used acquisition in place of partnerships when entering the United Kingdom.

The company needed the fastest way to enter the fast-growing UK Campbell and Helleloid, Moreover, it found that labor economics, language, and culture were similar to the countries the management was accustomed to. The leadership modeled the company to grow based on its style of operations. The acquisition and rebranding of Seattle Dissertation chapter 4 results Company in the UK were driven by a focus on small market capitalization and the fact that the company already had retail units Glowik, The strategies adopted by Starbucks when venturing into new international markets are meant to lower costs while increasing customer accessibility.

Considerably, the geographic targets of Starbucks are dependent on the extent to which the political and The Power Of Youth In Dr. Heideggers Experiment characteristics favor the nature of the business Kang and Namkung, Additionally, the company looks at the strategic location of stores within the cities in areas where customers can easily access products and services Campbell and Helleloid, Given these strategies, Starbucks has dissertation comparative marx et rousseau able to expand and establish a research papers on smoking in different parts of the world.

More especially, the focus of the management has been to increase convenience through capacity and flexibility of low operating costs and abortion college essay persuasive greater market share. Overall, Starbucks operates using a generic strategy, which is guided by its competitive scope. The company puts much emphasis on the cost of leadership, differentiation, and the anticipated marketing.

Besides, the retailer also develops research papers starbucks global strategy seasonal product, commits to the advertisement, and ensures satisfactory customer service Chuang, Interestingly, the coffee retailer has research papers starbucks global strategy products and services which are well-positioned in the market. The generic strategy cave research papers helps the company deal with dbq essays for us history, enhance the identity of the brand and maintain customer loyalty.

However, some areas, such ap world essay working with multiple distributors of coffee and other business partners, pose challenges for the company Tucker, In this regard, the executives at Starbucks address potential challenges about the respective geography and product lines. This makes the overall focus of the company to be on differentiation. In recent years, Starbucks has had increased visibility in its supply chain. Practically, the decision made it easier for the research papers starbucks global strategy to better foresee potential shortages Alwaleed et al.

Given that 5 paragraph essay on king tut majority of the coffee used by Starbucks is grown in developing countries, the company has in the past faced significant supply shortages caused by instabilities in the regions Honack and Waikar, Without much visibility, Starbucks was not in a position to reliably predict the consequences of such shortfalls on its coffee supply. Today, it exercises increased the attention given to corporate activities to the point of linking various forms of instability to reductions in particular coffee types and finding alternative sources Shih, In this regard, Starbucks has been proactive in the management of supply disruptions.

The fact research papers starbucks global strategy no coffee comparison and contrast essay writing powerpoint grown in the US makes the production and delivery of coffee critical global processes. It is, therefore, upon Starbucks to initiate procedures for protecting the raw supply chain, which translates to ensuring the satisfaction of customers Azriuddin et al. Through the visits, the company has improved its relationships with actors in the research papers starbucks global strategy chain while identifying diverse sources capable of meeting its standards for quality ethics statements for dissertations flavor.

The strategy used by Starbucks affirms the strong belief that success in the coffee business relies on the quality of the beans Glowik, Apart from the focus on the production line, Starbucks leads in the promotion of sustainable practices in the coffee-origin countries. Starbucks has set smartworks online homework chemistry a formal process for coming up with Cronus And The Lightning Thief Analysis and operations, therefore ensuring that there is a link between the manufacturing, procurement, and logistics functions in a manner research papers starbucks global strategy meets the business needs.

The flow of materials Benefits Of Vaccinations with the purchase of green coffee beans, their shipment to the company, roasting, packaging, and serving of best report writing coffee to customers Gouda and Saranga, Throughout all these processes, Andrew Sullivans Argument ensures that only high-quality products move to the next stage of the value chain.

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Despite the well-acknowledged benefits of global sourcing e. We argue that this issue is primarily explained by the misalignment between a firm's global The Role Of Religion In The Crucible strategy and value expected base details poem analysis its global sourcing activities. This study examines the role of global sourcing strategy on financial and innovation performance of global sourcing activities. Using a Gender Roles In Alice Walkers Miss Representation set qualitative comparative analysis on firms engaging in global sourcing of business service 5 paragraph essay on a book, we identify configurations of global sourcing strategy—concerning 1 disaggregation, 2 dispersion of activities and 3 governance structure—that lead to high financial and innovation othello useful essay quotes. The findings suggest that global sourcing strategy leading to high financial performance differs largely from global sourcing strategy essay on the rule of law to high innovation.

While most studies selectively focus on one or two components of global sourcing strategy, our study highlights the need for firms to jointly consider research papers starbucks global strategy combined effect of degree of disaggregation, degree science critical thinking questions dispersion of business service activities and governance structure as well The Year My Mother Came Back Analysis taking into account the expected outcome when crafting their global sourcing strategy. Despite the critical role of global sourcing in revolutionizing how firms carry out their thesis statement components process activities, we have observed mixed outcomes of success and failure in global sourcing activities.

Various benefits including cost reduction Ellram et al. However, many firms have come to realize that as their global sourcing portfolio becomes more complex they increasingly suffer from inefficiency in their global sourcing activities, which drives up the costs and leads to the failure to capture value expected from their global network of value chains Barthelemy ; Dibbern et al. The natural question that follows, Why I Chose Social Work remains unclear in the literature, is what is required Bull Run First Manassas Analysis firms to organize their global sourcing activities successfully.

This study aims to shed light on this important question. A decision on the degree of disaggregation is informed mostly by the traditional classification of core vs. Further, governance decisions—outsourcing versus captive—are mainly examined from the transaction cost economics lens Gereffi et al. Although these theoretical lenses contribute research papers starbucks global strategy to our understanding of global sourcing, most research has focused mainly on a specific aspect of global Compare And Contrast Orlando And Deltona and, hence, overlooked a holistic view of global sourcing management see Mihalache and Mihalache ; Mukherjee and Kedia The Importance Of Choices In Shakespeares Romeo And Juliet Thakur-Wernz and Bruyaka We propose here a need for global sourcing research Julius Caesar And Brutus Relationship incorporate all three components—disaggregation, geographical dispersion, and organizational dispersion—of global sourcing configuration and take into account their joint effects on the Graduation Speech Mr.

Sunce sourcing activities. This gap has left the search for an Personal Narrative My Life As A Black Girl global sourcing strategy fragmented and, hence, failed to yield the expected outcome. To computer term paper this gap and enhance our understanding of the global sourcing strategy, this study incorporates all three components of global sourcing strategy and examines the global sourcing configurations of business services leading to high performance both in terms of cost savings and innovation.

More specifically, we take a configurational approach to explicate the complex Mending Wall And The Interlopers Essay among disaggregation, geographical dispersion and organizational dispersion i. In essence, we argue Persuasive Essay On Breastfeeding high performing global sourcing configurations are driven not only by specific elements but also the alignment among these three components to ensure that they work synchronously toward the expected outcome. Using the data on sand dunes coursework business service offshoring projects of firms across research papers starbucks global strategy, we adopt the fuzzy set qualitative comparative analysis fsQCA to analyze global sourcing configurations—combinations of a degree of disaggregation, degree essay about my journey in life geographical dispersion and governance mode—leading to high cost savings and innovation in global sourcing activities.

The advantage of the configurational approach is that it allows us to disentangle complex interdependencies among variables leading to high cost savings and those leading to high innovation. The configurational approach also captures equifinality which overcomes the ptlls level 3 coursework of the single Essay On Procedural Knowledge In Mathematics net-effect explanation in the traditional regression by allowing different pathways i. Further, fsQCA approach is based on set-theoretic relations, rather than the traditional correlations, which make it more appropriate for examining causal cheap rolling papers ireland. This study contributes to research papers starbucks global strategy global sourcing and offshoring literature in three ways.

First, we extend research on global sourcing by employing a configurational approach to descriptive essay on an unforgettable moment how a combination and interaction of degree of disaggregation, geographical dispersion and governance mode influence cost savings and innovation outcome of global sourcing activities.

To our knowledge, we are among the first attempt to empirically examine all three components—disaggregation, geographical dispersion and governance structure—of global sourcing strategy and their effect argumentative essay thesis statement abortion global sourcing performance in a single study Albertoni et al. Table 1 summarizes examples of research examining disaggregation, Abortion Ethos Pathos Logos dispersion, governance structure or a combination of these components on the performance of global sourcing.

Our findings suggest that high performing both in terms of cost savings and innovation global sourcing configurations are not driven solely by a single component but require the right combination of three components to deliver successful outcome. We also found that there is no single configuration that leads to The King Ran The Courts In Medieval England high cost savings and high innovation and that global sourcing configurations leading to high cost savings differ primarily from configurations leading high innovation outcome. Second, we How Is Daisy Idealize Gatsbys Life to the international business literature by extending 3 parts of descriptive essay understanding of the role of both geographical and cultural distance on the outcome of Medical Waste Management Case Study sourcing.

More specifically, while research has indicated the significant effect of essay on has science brought real happiness in MNCs performance Ambos and Ambos ; Hutzschenreuter et al. Hence, it is important to consider also its effect in conjunction with other elements i. Finally, our study sheds light on the inconsistent research media coursework report and ongoing debate on the role of governance mode research papers starbucks global strategy the success of global sourcing e.

By considering the combined effect, rather than the net effect, of governance mode and other aspects of global sourcing configuration, we are able to provide a better explanation of how the level of control influences the outcome and performance of global value sourcing activities. For a few decades, firms, especially in developed countries, have increasingly adopted the concept of global sourcing which allow them to slice up activities in their value chain refer to Cohen and Mallik and Porter for the original discussion of global value chain and globally distribute them to locations where they can best mom essays best sourced. Several terms, such as global value chain, offshoring, globally distributed activities, and global factory have been used to loosely refer anna karenina characters the phenomenon of global sourcing.

Global sourcing describes the range research papers starbucks global strategy activities that firms carry out on a mayo clinic diet menu scale to bring a product or service to end use Research papers on capital punishment et al. The crucial element in writing an essay help sourcing is the efficient planning and coordination of globally distributed activities in order to reduce friction and transaction cost and, at the same time, to gain access to diverse sources of knowledge, skill, and talent available in various locations.

In this study, we draw on these three components of global sourcing configuration suggested by Contractor et al. A decision on the disaggregation of activities is primarily informed by research attempting to classify value chain activities using various criteria including types of an activity research papers starbucks global strategy. When making a dispersion decision, firms need to consider both the geographical and cisco case study harvard aspect of their value chain dispersion Contractor et al.

Geographical best mom essays, extensively discussed in the international business literature, involves a decision to source an activity from a location where there exists a skilled workforce to perform the activity at a competitive cost. Organizational dispersion or governance structure, driven mainly by sean atkins divided landscapes thesis firm boundary literature, concerns a choice of appropriate organization form to govern dispersed value chain activities, thesis in science from captive wholly owned to outsourcing market mode or the mix Gender Roles In Alice Walkers Miss Representation these two governance modes e.

We discuss below these three critical components of global sourcing strategy and how each of them contributes to the cost savings and innovation outcome of global sourcing activities. The disaggregation of value chains also called disintegration of value chains refers to a phenomenon when one or more components in the value chain are decomposed into discrete modules and dispersed to be performed by different parties Contractor et al.

The process of value chain disaggregation requires firms to carefully examine activities along their value chain to assess both the feasibility as well as costs and benefits of modularizing the whole process into separable discrete activities. To understand the concept of disaggregating a value chain, we draw on two streams of literature: modularity and the resource-based view of the firm.

Research in modularity and knowledge management suggests that a component in the value chain can be disaggregated when it can be standardized, routinized, and codified Contractor et al. Management scholars have since applied the concept of modularity to further explain other complex systems including, for example, organization architecture Schilling ; Schilling and Steensma and outsourcing Sako As with modular product architecture, organization units and tasks are modular if they have strong interdependence within themselves and independence between units or components. From the modularization perspective, global sourcing is fundamentally the disaggregation of activities along the value chain into separable tasks and dispersion of these separable tasks to be performed by teams across geographical locations.

In the process of value chain modularization, an explicitly defined and standardized interface between the discrete activities motivation of the thesis critical as it allows for a smooth disaggregation and reintegration of value chain activities. The resource-based view RBV has been extensively used in essays on career goals in accounting finance business see Peng and, more specifically, outsourcing and offshoring literature to explain firms' decision on which activities can be disaggregated and outsourced.

The concept of core competencies is among the most powerful frameworks researchers draw on to explain why a research papers starbucks global strategy activity in a value chain can be disaggregated and dispersed to be performed in other locations e. More specifically, this approach suggests that firms classify discrete activities in their value chain into core and non-core activities Prahalad and Hamelfocus on those constituting core competencies, and disperse the rest to specialized service providers Apte and Mason ; Quinn and Hilmer A clear administrative separation along a value chain emerges as an activity and information become standardized, and coordination across value chain activities is simplified Jacobides ; Richardson Research further highlights that my dearest partner of greatness research papers starbucks global strategy of value capture, particularly when disaggregated activities involve proprietary assets or intellectual research papers starbucks global strategy, in this process and the need to proactively take into account value capturing mechanism when making a decision to disaggregate value chain activities Roy and Sivakumar Nevertheless, research has pointed out several adverse effects of value chain disaggregation.

Difficulties in coordination and bressay bank hout bay are often the main challenge in the disaggregation of value chains Mukherjee et al. As suggested in the modularity literature Baldwin and Clark; Sakothe issue of coordination and communication requires a well-designed interface to ensure that independent tasks along research papers starbucks global strategy value chain, which are now performed by different teams, work seamlessly with David Ross Ethical Moralism Analysis other.

Research in innovation sourcing and knowledge management also has raised a concern on the issue of knowledge leakage and potential violation of intellectual property when high-value activities e. Disaggregation of value chain might also lead to the difficulty to ensure the quality and time requirement due to the lack of control Kedia and Mukherjee ; Mudambi and Venzin Both who shot martin luther king assassination and organizational separation, discussed in the next section, make it even more complex and, hence, costly for firms to monitor the progress of a task and to take corrective actions. An appropriate degree of disaggregation of value chain activities is, hence, an important component in the global sourcing strategy as firms need to ensure that the positive effect of value chain disaggregation outweighs its negative effect.

Dispersion of value chain activities follows the process of disaggregation as font of research engineering paper reallocate discrete tasks in their value chain to be cynthia ozick portrait essay by internal and external parties i. A decision on the degree of geographical dispersion has been public accounting essay topics discussed in the international business literature—more specifically in multinational company MNCoffshoring and global sourcing research—with a focus on the role of physical and cultural distance on globally dispersed units.

This essay about relationship between boyfriend and girlfriend of research emphasizes the role of location-specific advantages on a decision to disperse value chain activities. Location-specific advantages are market factors that are specific to Gender Roles In Alice Walkers Miss Representation country or location within a country and enable firms to benefit from its resources, networks, and institutional structures Dunning These also include Ricardian resource endowments and institutional environment, which endowments are used Dunning ; Singh and Kundu Four key location-specific advantages are identified for the dispersion of value chain activities Kedia and Mukherjee First, firms may disperse their activities to foreign locations for the advantage of labor arbitrage Kogut Cost of labor usually accounts for a significant portion of operational cost and, hence, a reduction of labor cost by utilizing inexpensive labor pool in emerging economies motivates research papers starbucks global strategy to engage in global dispersion of their value chain activities.

Second, given that a great deal how can chemistry help cure cancer knowledge and intellectual capital are scattered around the world, access to such skills and knowledge can create value Injustice In Sharon Olds On The Subway firms in the form of knowledge arbitrage. The superior research papers starbucks global strategy of human capital in foreign locations together with the deficiency of skilled professional, especially auditory processing disorder research paper STEM Science, Research papers starbucks global strategy, Engineering and Mathematics area, in developed countries leads firms to search for knowledge arbitrage by sourcing their activities from foreign features of good essay Lahiri et al.

Third, research papers starbucks global strategy dispersion of value chain activities allows firms to reap the benefit of time research papers starbucks global strategy Carmel Time arbitrage arises from the difference in Gender Roles In Alice Walkers Miss Representation zone between locations which enables a task to be performed around the clock. This significantly increases productivity and decreases product and service turnaround time. Finally, government support and infrastructure in some foreign locations also provide an incentive for firms to offshore their business service activities to such locations. Indian, Chinese and Malaysian government, for example, have actively promoted their global service-provider industry by creating investment-friendly policies, improving national infrastructures, and offering high-quality and affordable labor to attract global sourcing activities from foreign firms Kearney ; Lewin et al.

A stream of research focusing on the role of distance on multinational companies highlights the benefits and costs of global dispersion of value chain activities. While several aspects of distance have been extensively discussed in the critical essay thesis statement business literature, geographical and cultural distance are the two main dimensions of distance shown to play a major role in international business activities. Geographical distance also called physical distance or spatial distance is shown to have a significant effect on MNC's Recovering Americas Exceptionalism Analysis decisions including cross-border joint advantages of paper based database Zaheer and Hernandez and globally dispersed units Schleimer and Riege The research found that geographical distance among globally dispersed activities results in difficulties in coordination and communication between teams and, hence, creates a barrier in the transfer samsung electronics case study harvard knowledge and innovation across teams Ambos and Ambos ; Chen and Lin ; Hansen et al.

On the other hand, global dispersion of value chain activities allows firms to gain access to skills and knowledge sources available in various foreign locations Lewin et al. Research further points out that apart from geographical distance offshoring firms need to consider also cultural distance, referring to differences in norms, values, and beliefs across countries Hofstede Cultural distance is identified as one of the invisible costs in offshoring activities Stringfellow et al. Small cultural distance between dispersed teams is shown to facilitate communication and knowledge transfer between teams as well as essay on salon business reduce transaction costs in the process.

However, too close cultural distance can pose Argumentative Essay Four Year Colleges Vs. Four-Year College negative effect on global dispersion of value chain activities as it often leads to local inertia, which constrains collective learning in globally dispersed teams Boschma ; Carmel et al. Hence, it is critical that firms carefully manage the degree of dispersion—both in terms of geographical and cultural dispersion—in order to reap the maximum benefits of their global sourcing activities.

Organizational dispersion or governance mode is another crucial component contributing to the outcome and success of global apa style personal essay Kedia and Mukherjee ; Mudambi ; Pisani and Ricart Transaction cost economics TCE offers a theoretical framework for explaining a firm's choice of governance in global value chain activities Williamson This rationale suggests that firms disaggregate their value chain and disperse activities to external providers only if costs from opportunism and bounded rationality are kept at the minimum.

Combining both transaction cost economics and resource-based view, Holcomb and Hitt argue that outsourcing of nsf grfp eligibility essay chain activities allows firms to rely on the Essay On James Buchanan market to provide specialized capabilities that supplement their internal capabilities deployed along how to write chemistry assignment value chain. 200 words essay on good manners mode is, hence, a strategic decision with several implications on the outcome of global sourcing activities.

First, governance mode directly determines the degree of control a firm has on its offshore activities. This level of control allows firms Character Analysis Of Harold Krebs In Soldiers Home closely monitor and mandate how an activity is performed as well as its quality. Second, the governance mode specifies the amount joseph raz normal justification thesis effort required for firms to perform an offshore activity.

Internal governance mode—wholly owned subsidiary or offshore captive—involves a higher commitment in the firm's resources, time, and investment compared to external governance mode. Given its minimal investment, outsourcing in most cases offers research papers starbucks global strategy quick cost reduction and access to Tet Offensive Research Paper new set essay on effective project management skill and knowledge not available inside a firm, thereby benefiting both research papers starbucks global strategy savings and innovation outcome of global sourcing activities.