Outsourcing in retail

Abstract

ABSTRACT
Modern strategic techniques have been increasingly applied in
recent years, both in manufacture and retail, individually or
concurrently. The main goal of their application in the retail business is continuous improvement, in particular by reducing costs of
competitiveness and (business and financial) performance, while increasing customer satisfaction and meeting the needs of
customers/consumers. One of the most important strategic techniques increasingly used not only in manufacturing but also in modern retail is outsourcing, which basically involves purchasing goods and/or services from independent external suppliers.
The research in contemporary practice of the retail business
has revealed that the application of outsourcing technique contributes to stronger commitment of management towards the
activities that are the core of competitiveness, reducing costs, improving competitiveness and creating added value. All this has a long-term impact on improving performance in the retail sector.
Starting from the developed theory and conducted practical research, this paper emphasizes the importance and specific problems of application of outsourcing the strategic technique in the modern retail. Their knowledge is very important for an effective implementation of outsourcing as a function of improving overall performance in retail. This is especially true for retailers in developing and transition countries, as it is the case, for example, with Serbia, where the use of outsourcing is at a very low level compared to developed countries. In the future, because of its economic importance, outsourcing will certainly be more applied in the retail sector of respective countries, with the expectation of a growing trend at approximately the same level as it is in developed countries in Europe and America.

Outsourcing in retail. Available from: https://www.researchgate.net/publication/324168673_Outsourcing_in_retail [accessed Apr 03 2018].

Full text

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* University of Belgrade, Faculty of Economics, rlukic@ekof.bg.ac.rs
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OUTSOURCING IN RETAIL
ABSTRACT
Modern strategic techniques have been
increasingly applied in recent years, both in
manufacture and retail, individually or
concurrently. The main goal of their
application in the retail business is continuous
improvement, in particular by reducing costs of
competitiveness and (business and financial)
performance, while increasing customer
satisfaction and meeting the needs of
customers/consumers. One of the most
important strategic techniques increasingly
used not only in manufacturing but also in
modern retail is outsourcing, which basically
involves purchasing goods and/or services from
independent external suppliers. The research in
contemporary practice of the retail business
has revealed that the application of
outsourcing technique contributes to stronger
commitment of management towards the
activities that are the core of competitiveness,
reducing costs, improving competitiveness and
creating added value. All this has a long-term
impact on improving performance in the retail
sector. Starting from the developed theory and
conducted practical research, this paper
emphasizes the importance and specific
problems of application of outsourcing the
strategic technique in the modern retail. Their
knowledge is very important for an effective
implementation of outsourcing as a function of
improving overall performance in retail. This is
especially true for retailers in developing and
transition countries, as it is the case, for
example, with Serbia, where the use of
outsourcing is at a very low level compared to
developed countries. In the future, because of its
economic importance, outsourcing will
certainly be more applied in the retail sector of
respective countries, with the expectation of a
growing trend at approximately the same level
as it is in developed countries in Europe and
America.
Keywords:
JEL Classification:
1. INTRODUCTION

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Retail: Outsource 'til You
Drop,
Online
online
Tesco
Retail:
Outsource 'til You Drop,
(e-commerce),
(network),
2. LITERATURE REVIEW

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3. HYPOTHESES, METHODOLOGY AND
DATA
4. DEFINITION, TYPES AND IMPORTANCE
OF OUTSOURCING IN RETAIL
Ross Perot
Electronic Data
System

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(business
process outsourcing)
(Information
Technology Outsourcing
(Business Process
Outsourcing
(electronic data processing
www.zylun.com/ousourcing
-global statistics).
Datamonitor
www.zylun.com/
ousourcing-global statistics).
Gartner
IT outsourcing
Economist Intelligence Unit,

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Porter's value chain
Outsourcing in Poland,
Wholesale and retail
Source: The use of ICT in Serbia 2010, Statistical Office of Serbia.

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.
logistics outsourcing
Fortune 500
Source: Bourlakis (2011)

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,
5. PERFORMANCE FEATURES OF
OUSOURCING IN RETAIL
Source:
Germany
INDIVIDUAL
ECONOMIC
CONTROL
DATA/SEGMENT
ORGANIZATIONAL
- Increased knowledge and expertise
- Alternative staff increase for short term projects
- Cost savings
- Increased return on equity
- Share the risk
-Elimination/reduction of the weakness of the MIS
- Outsource the non-strategic
- Focus attention on the strategic
- Outsource the weakness of the MIS department
- Applicable to the procedurally oriented organizations

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Source: The 2004 Outsourcing World Summit.
(According to: Berke, 2010)
Source: Berke (2010)
Outsourcing Journal,
INDIVIDUAL
ECONOMIC
CONTROL
DATA/SEGMENT
ORGANIZATIONAL
- Loss of in-house expertise
- Severance or transfer costs of existing IS staff
- Higher than expected outsourcing bills
- Increase tax liability
- Decreased profit margin
-
Hidden costs
- Loss of control over:
- Quality of IS services
- Disaster recovery
- Confidentiality
- Determination of strategic non-strategic
- Confidentiality/security
- Loss of control in vertically integrated organizations
- Outsourcing requirements in dynamic organizations may
be difficult to contract
- The extent of end user computing and the ability to keep
the users happy

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,
Recent Trends in Retail Oursourcing,
Source: Niranjan (2011)
Tesco,
Target, Supervalu, Walmart)
INPUT and OUTPUT
Marketing Logistics Customer
support
Sales and
sales growth
EXTENT OF OUTSOURCING PERFORMANCE
Other functions Cutomer
satisfaction
Repurchase
intention
Customer
retention
Sales
prospect
conversion
ratio

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online
online
Note: online
Source:
6. OUTSOURCING IN ZARA COMPANY
Source: A Dissertation Paper on Outsourcing in
Retail Clothes Zara: Profit maximization or fair
trade? January 29, 2011 (Internet source)

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A Dissertation Paper on Retail Zara
Clothes in Outsourcing: Profit maximization or
fair trade?,
7. CONCLUSION
Tesco, Zara, Walmart

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REFERENCES
Books
A Dissertation Paper on Outsourcing in
Retail Clothes Zara: Profit maximization or
fair trade?
Outsourcing in the Retail Industry: From
Europe to India and China;
Aligning growth with talent
Outsourcing in the Retail Industry,
Retail
Management,
Central and Eastern Europe IT
Outsourcing Review 2010,
Retail
Industry: What's in Store for
Outsourcing?A Trend Comparison of the
recent 2006 and a Look Beyond
Cost
Accounting,
IT outsourcing
market in Poland,
Retailing Management,
Menadment
odnosa sa kupcima Management
relationships with customers
,
Ra unovodstvo
trgovinskih preduze a Accounting for
trading companies
IT
Outsourcing and Employment Growth at
the Firm Level,
Management Tools & Trends,
ICT in Serbia, At a
Glance,
Outsourcing in Poland
The use of ICT in Serbia 2010
Can IT Outsourcing
Enhance Firm Performance of Banks: an
Empirical Study of IT Outsourcing Impact
on Banks' Performance,
Journal articles

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Europe Journal of
Marketing,
Journal of
Business Logistics,
Journal of Strategic Information
Systems,
Technics Technologies Education
Management
Economia. Seria Management
Economic research
Journal of
Knowledge Management,
Industrial Management,
Transportation Research Part
E,
Supply Chain
Management: An International Journal,
Journal of
Business Research,