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hi can you explain what off shoring is? is it to develop you business in geographic market?
also for joint ventures, is a company owned by parents and with subs, is this same as franchising?
No.Typically it is moving some processes abroad where they are probably done more cheaply. Eg manufacturing and some call centres.
In a JV, typically tow or more cmopanies form a third (the JV Company) where they both put resources to carry out a project.
In a franchise the franchisor (eg MacDonalds) allows a third party (the franchisee) to use its brand and processes. The francisee owns his/her own business but gains form the brand, knowhow and marketing of the franchisor. The franchisee pays the franchisor for the use of brand and methodology, but the franchisee usually has to operate within strict rules set out by the franchisor.
Thanks Gromit
JV is similar to strategic alliance as 2 companies co operate and share its resources but the only difference is they do not form another company, is this right?
Yes. Strategic alliances is a relatively loose cooperation. JV if a more formal business venture.
In my opinion no, this would not be an appropriate use of the 6I framework. Independence of location is concerned with the potential, due to Internet technologies, to be able to extend your market reach beyond the physical locations that you have. It refers to sales and marketing reach. For example, having the potential to market, sell and distribute ebooks or software globally using the Internet.
I don’t think independence is necessarily confined to that – though access to a global market-place is the most important aspect of independence. When we visit a web-site (say Amazon) we do not know, and often do not care, where the business is located. This allows businesses to escape the high street and operate from a cheap area of the country – or another country. Many call centres are off-shored and they will undoubtedly make use of internet technology (such as VOIP, like Skype) to facilitate their business operations.
I am happy to concede Gromit!
You give two very good examples that relate to the production and delivery of a service such as in a call centre and also to physical goods such as those from Amazon. The common thread is the use of Internet or other electronic communications technologies to enable independence of location.
These same technologies enable a firm to locate its manufacturing offshore, whilst maintaining management controls, communications and synchronising activities etc.
The world has moved on since the 6I framework was originally conceived as a way of encouraging managers to consider the opportunities brought about by the “new media” (as they were called at the time).
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