Global Sourcing

GLOBAL SOURCING

PROBLEM IDENTIFICATION AND BACKGROUND INFORMATION

Global sourcing has been an emerging issue in international purchasing patterns over the years since business are constantly growing to capture new markets beyond their national barriers. This has necessitated the need of businesses to venture into international markets to increase their grip at the same time obtain a competitive advantage over their market rivals. Despite global sourcing being a general objective for every business firm that seeks to expand its operations it is sometimes very difficult for some firms to achieve it due to some inherent factors that act as obstacles towards the achievement of this goal. Advancement of technology has reduced the world into a global village thus business transitions can be conducted remotely and from virtually anywhere thus geographical boundaries are no longer an issue to reckon.

Over the years massive steps have been made in the business sector to liberalize it in a manner that will ensure business transactions are conducted freely without any form of obstruction across national boundaries to ensure international purchasing is actualized. However this has only be achieved by a section of market players while the rest have imminently failed due to some inherent factors that do not favour them to achieve that globalization objective. Global sourcing has not been positively embraced by firms due to a number of factors which are elaborated below.

Global sourcing has failed to be implemented by a number of firms as a result of the frequent fluctuations in the international currencies. Fluctuations in major world currencies is a core reason that drives many firms out of the international market front since most of them are not flexible enough of to cope up with the uncertainty associated with the changes, thus whenever such firms expand their operations to cover the international marker they fail or ultimately go out of business as the unprecedented...