Efficiently sourcing back-office functions has long been a focus of retailers and consumer products manufacturers (retail and consumer companies), primarily with an eye on reducing costs. However, given the multitude of challenges facing retail and consumer companies today—such as increasing globalization, growing pressures on margins, and diminishing customer loyalty—these companies have an opportunity to use sourcing much more strategically as an enabler to achieving their key business objectives. Sourcing is not solely about cutting costs, it can be used as a tool to protect and enhance brand equity when thought of on a larger scale.
The purpose of this paper is to discuss the challenges retail and consumer companies face and how strategic sourcing using a portfolio approach can help retail and consumer companies meet such challenges as:
- protecting and enhancing brand value
- moving into new geographies and markets
- managing consolidation; managing changing markets
- dealing with margin pressures.
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