The document defines captive centers as overseas subsidiaries that serve a parent company, presenting alternatives to offshoring or nearshoring. It describes four types of captive centers: hybrid, shared, divest, and terminated, each with distinct operational characteristics. Additionally, it highlights factors a parent company must consider when determining which strategy to adopt, including goals for cost savings versus growth and the maturity of the offshore market.

1. LOUIS RICCARDI DAVE OFOSU WAYNE COX Captive Centers

2. Definition An overseas subsidiary that is set up to serve the parent company. Alternative to offshoring or nearshoring.

3. Four Major Types of Captive Centers Hybrid Captive Performs core business processes for parent company but outsources noncore work to offshore provided Shared Captive Performs work for both parent company and external customers. Divest captive Have a large enough scale and scope that it is well-positioned to be sold for a profit by the parent company. Terminated Captive Has been shut down, usually because its inferior service was hurting the parent company’s reputation.

4. What must the parent company consider in determining which strategy to use? The parent company must consider its goal for the center. i.e. Cost savings vs. growth They must also consider the extent to which the offshore market is developed.