Global sourcing refers to sourcing goods and services from global markets across geographic boundaries. It allows companies to take advantage of low-cost skilled labor, raw materials, tax breaks, and tariffs available in other countries. Common industries that benefit from global sourcing include manufacturing, skilled services, and call centers. Several economic theories relate to global sourcing, such as absolute advantage, comparative advantage, and competitive advantage.

1. Rajani Raising.
Roll no 62.
Human Resource Mgmt.

2. Global sourcing is a term used to describe practice of
sourcing from the global market for global market for
goods & service across geo- political boundaries.
Low- cost skilled
labor.
Low- cost raw- Tax breaks &
material. low tariffs.
Global
Sourcing

3. Canada
High- priority,
Support
Integration
Testing
Project mgmt,
Client Near- shore Facility
Interface, India
Analysis,
Final
integration
U.S.A
Off- shore Facility
Programming,
Routing
Support, Unit
Testing, QA.
On- site team

4. Ideal Industries for Global Sourcing
Manufacturing Skilled Services Telephone
Call centers

5. Adam Smith Absolute
Advantage Theory
David Ricardo Comparative
Advantage Theory
Michel Porter ‘s Competitive
Advantage Theory

6. The principle of absolute advantage refers to the ability of
a party (an individual, or firm, or country) to produce more
of a good or service than competitors, using the same
amount of resources.
E.g.:- Unit labor costs
Britain 10 5
Portugal 5 10

7. The law of comparative advantage says that two countries (or
other kinds of parties, such as individuals or firms there as) will
both gain from trade if, in the absence of trade, they have
different relative costs for producing the same goods. Even if
one country is more efficient in the production of all goods
(absolute advantage) than the other, both countries will still
gain by trading with each other, as long as they have different
relative efficiencies. E.g.
Country Production
Before Trade After Trade
Wheat Wine Wheat Wine
England 8 5 18 0
Portugal 9 6 0 12
Total 17 11 18 12

8. Fishing, Shelter
Fishing constructing, w
ater
carrying, cookin
g!!!!

9. Competitive advantage is
defined as the strategic
advantage one business
entity has over its rival
entities within its competitive
industry.
Achieving competitive
advantage strengthens and
positions a business better
within the business
environment.

10. Cost Differentiation Focus
leadership strategy
strategy
strategy
Ways to achieve Sustainable Competitive Advantage

11. Distinctive
Competencies
Differentiation
Advantage.