Practice 22

Question 1

Offshoring

Answer 1

manufacturing outside its home market anywhere in the world based on cost-efficiency (ex. Apple’s manufacturing facilities in Ireland and Singapore)

Question 2

Nearshoring

Answer 2

manufacturing outside its home market but regionally close / more favorable market access (ex. GM/Auto factories in Mexico servicing US market)

Question 3

Reshoring / onshoring

Answer 3

manufacturing moving back to home country as a result of improved operational efficiency or legal / regulatory / trade constraints

Question 4

why global sourcing

Answer 4

• Reduce costs / increase competitiveness (cheap labour, laxer work rules, lower land and facility costs)
• Improve quality of products / services
• Gain access to exclusive raw materials (only available in other markets)
• Increase exposure to worldwide technology
• Improve delivery-of-supplies process
• Establish presence in foreign market
• Diversify supplier base (supplement domestic suppliers)