Source Point

Over the past many years we have been ranked with major developments and strategies to move on the pattern of global sourcing hence there are trillions of companies which are perusing to organize a repute in establishing a global supply chain as well as they are working to increase the number of countries in this regard for making positive changes for the betterment of global sourcing management. In a result we can figure out a colossal increase in the quality and variety of products which are now accessible easily across the globe throughout the world.

The leading companies of international markets have to look at the major factors, are possibly involved in the management of sourcing and all kind of alternatives which are expected to engage in maintaining the business.

• Companies have to ponder on the alternate supply resources named as Globalization.
• The education of workers available in their business or standard of education of workers is engaged with the work in other countries.
• The size of domestics.
• Condition of imports and exports markets.
• Market strategies or market liberalization

Not only these factors are involved but there are also several challenges in global sourcing that one company faces before making a relation in global sourcing plus proper attention is needed in order to identify and establish any kind of business relationship with new supplier.

Most of the new suppliers may not be supporting the supply sources under advanced set up or their provided supply resources may lack new technology system and methods and many times they are not able to share their information with you very easily.

It is very important for companies to make a research on the proficiency and skills of overseas suppliers and compare their negotiating strategies with incorporating local business culture.

Nowadays, the numberless companies are moving forwards to finance on global sourcing consequently different cutting edge technologies have introduced to settle up full-fledged Supply Management Offices_ establishment of several local joint ventures are an explicit examples of such sourcing panels.

You can expect to have a successful sourcing management by focusing on useful strategy procurements, best supply chain sources and on the top consider the qualified candidates who can utilize the company’s resources for strengthening the business.

The sourcing industry is getting matured day by day; the fact to maintain the good relationship has got more importance than the process of managing the overall structure of sourcing. That’s why it is now old conception that only service provider might be liable for work done in right as the same condition is employed to the service buyer. The fundamental perspectives of what we will do and how we will manage sourcing relationships for the long-term is now valuable for both service buyers and service provider.

There are few points that you need to pay attention to prior to the sourcing management and four key points must be observed by both parties; service provider and service buyers.

• Performance management (getting the work rightfully and all in the right directions)
• Financial management (validating, managing and assessing the possible credit investment and budget )
• Contractual management (ensuring the terms of work and satisfaction)
• Relationship management (setting dimensions to regulate the positive negotiating )

All these four key domains are equally important in managing the best sourcing deals; these terms are very beneficial for those who want to avail the higher satisfaction level; and settle up the right dimensions for better results.

Never take anything for granted, when you are doing business in a foreign country. All sorts of assumptions that are valid in one place can trip you up elsewhere if you fail to consider that customs may vary. There are many true business stories that points out the fact that cultural differences can greatly impact a business and related communication. For example a U.S. fragrance manufacturer decided to sell its line of men’s cologne in North Africa; it used its tried and-true North American ad, which pictured a man and his dog in a rural setting. The fragrance was bombed in North Africa. What did the fragrance manufacturer could not realize? The fragrance manufacturer overlooked that North African people often consider a dog to be a sign of bad luck or a symbol of uncleanness. Another example that highlights the importance of understanding of cross cultural communication differences with the perspective of international trade is the failure of a French firm which setup an automated timber mill in East Africa. But this mill turned out to be inoperative and the company eventually tore it down. Reason was that the company overlooked the fact that supply of power was often inadequate in East Africa and thus they did not have enough electricity to run the plant and consequently had to suffer loss.

A society’s culture affects its member’s view of the world and thus their responses to people and events. Effective intercultural communication depends on recognizing ways in which people differ. Thus it is important to follow certain points while communicating in terms of international trade. Considering social customs is foremost in this regard. It means that one should be able to assess that how people in other cultures react to strangers, whether they react in a friendly, hostile or reserved way. Socially what words or gestures do people use to greet each other? It is also important to know the appropriate manners when you enter or leave room. It is also important to know that how names are introduced and even how one should be touching other person while greeting him or her. Summing up it is important being a cross cultural communicator to develop certain skills. Learning or acquiring these general intercultural communication skills will help you effectively adapt in any culture which is quite important in terms of international trade communication.

• Take responsibility for communication- Don’t assume it’s the other person’s job to communicate with you.
• Withhold judgment – Learn to listen to the whole story and accept differences in others without judging them.
• Show respect- Learn how respect is communicated- through gestures, eye contact and so on in various cultures.
• Empathize – Imagine the other person’s feelings and point of view; consider what he or she is trying to communicate and why.
• Tolerate ambiguity -Learn to control your frustration when placed in an unfamiliar or confusing situation.
• Look beyond the superficial – Don’t be distracted by such things as dress, appearance or environmental discomforts.
• Be patient and persistent - If you want to communicate with someone from another culture, don’t give up easily.
• Recognize your own cultural biases – Learn to identify when your assumptions are different from other persons.
• Be flexible – Be prepared to change your habits and attitudes when communicating with someone from another culture.
• Emphasize common grounds – Look for similarities to work from.
• Send clear messages – Make both your verbal and non-verbal signal clear and consistent.
• Increase your cultural sensitivity - Learn about variations in customs and practices so that you’ll be more aware of potential areas for miscommunication.
• Deal with the individual - Communicate with each person as an individual, not as a stereotypical representative of another group.
• Learn when to be direct – Investigate each culture so that you know when to send your message in a straightforward manner and when to be indirect.

These skills will be very helpful to communicate cross culturally in terms of international trade perspective. However, apart from verbal communication it is also important to handle written messages properly as business communication is also largely based on written documentation as well. Be especially concerned with clarity:

• Use short precise words that say exactly what you mean.
• Rely on specific terms and concrete examples to explain yourself
• Stay away from slang, idioms, jargon and buzz words. Abbreviations, acronyms (such as CAD/CAM) and unfamiliar product names may also lead to confusion.
• Construct sentences that are shorter and simpler that those you might use when writing someone fluent in your own language.
• Use short paragraphs. Each paragraph should stick to one topic and be no more than eight and ten lines.
• Help readers follow your train of thought by using transitional phrases. Precede related points with expressions like addition and first, second, third.

Your word choice should also highlight relationship between you and your audience. In general, US business people will want to be somewhat more formal than they would be when writing to people in their own country. In many cultures, people use a more elaborate style, so your audience will expect more formal language in your letter. A letter written by a supplier in Germany to a nearby retailer might appear stilted to a US reader on the grounds that people in the US like to be more direct and to the point. But indirect communication will be common in many cultures. Like in Germany many business letter open with reference to business relationship and end with compliments to the recipients. Of course, be careful not to carry formalities to extremes, or you will should unnatural.

Although language and cultural differences are significant barriers to communication, these problems can be overcome by maintaining an open mind. Unfortunately, many of us lapse into ethnocentrism, the predisposition to make assumptions about other groups according to your own group’s standards. To avoid ethnocentrism while communicating in terms of internal trade is vital as it can cause major misunderstandings and substantial loss to a business deal. A dose of open mindedness can prove to be an effective remedy in this regard.

In the recent years, India has emerged as one of the most thriving   economies on the planet. With more than 1 billion human resources and a wealth of natural resources, India has become an ideal center for manufacturing various products. Since the labor is available at very low wages, people from all around the globe are targeting India for manufacturing their products. This allows a great prospect for various businesses that seek to get their products manufactured in low cost, thus making huge ROI.

Owing to this very factor, India has come into the limelight in the world of trade and commerce. The entire world is looking to it and evaluating business prospects in India. Particularly in the product manufacturing sector, India has been able to capture and hold a distinctive position.

The unwavering GDP growth rate and sturdy FDI inflows are evident of the strong position of India in the arena of product manufacturing. Countless multi-national organizations are spreading their wings and looking to make India their hub of product manufacturing. According to the Senior Managing Director of Toyota Motor Corporation, “India is one of the most promising markets of the 21st century.”

It is noteworthy that India started paving its way towards building its economy ever since the commencement of the liberalization progression. Although the services industry of India has been its driving force, the product manufacturing sector has been making significant developments. Though slowly, but the product manufacturing in India is coming to the global scene and luring people to target India for business.

According to the general perception, the product manufacturing in India is going to take the country to new heights of development and expansion.

As India is one of the fastest growing economies on earth, it is pretty evident that product manufacturing sector will soon be at its pinnacle. In fact, India’s product manufacturing sector is already booming at a quick pace. Its average yearly rate is 6 percent every year amid 1990 and 2004. It is an astounding rate of development in the product manufacturing sectors as it is even higher than the 5.8 percent growth made by industry on the whole!

The product manufacturing sector has in fact a key role in perking up the overall industrial GDP of India. Not only this, this progression in the manufacturing has also helped to close gap among the GDP escalation rates of India and China.

This expansion has opened new vistas of economical development for India as now Indian products are gaining popularity in the global market as well. Do you know that India exports products of almost US$ 50 billion annually? Yes, this is right! This is escalating at the rate of 20 % per annum as well.

According to a study conducted by the Confederation of Indian Industry, it is estimated that product manufacturing sector (export market) in India can reach US$ 300 billion by 2015 at the rate of 17% per year!

It is believed that about US$ 70 billion to US$ 90 billion of this sum can be hooked from products such as garments, auto parts and chemicals. Electrical and electronic products also fall in this hot list. The reason for this fast development in the product manufacturing is the India’s proficiency in skill-intensive manufacturing sectors including textiles, auto parts etc. It is this very expertise of the Indian market which provides the country a winning edge over its competitors in the world market.

It is noteworthy that despite of the fact that low cost labor can also be acquired from other neighboring countries of India but it is the amalgamation of high technologies together with proficient workforce of the Indians which has given it a leading edge over other market players.

All these factors contribute to the thriving product manufacturing industry of India. It is opening new gateways for foreign investment and growth for India. Therefore product manufacturing in India has become a very enticing prospect for local as well as foreign investors. The innate strengths of India such as the natural resources etc. help to boost this sector even more.

In the world product manufacturing panorama, India has already established itself as one of the leaders in several product lines. India is already serving the global market with its product manufacturing in sectors such as engineering, and electronics. Some other products made by India for global market are textiles, chemicals and metals. It is also one of the top product manufacturers in leather goods and machine tools. Some other manufacturing sectors India is making its mark include food processing as well as gems and ornaments.

According to World Bank’s feedback, India has the most suitable climate for investment. Particularly if you are considering product manufacturing in India, there can be no better place to do it. This is because India has the ideal environment for investment in the product manufacturing sector other than the bundle of human and natural advantages it has to offer. Compared to other developing economies as well, India is quite ahead.

Do you know that India is the leading three wheeler market in the world? It is the second largest two wheeler market around the globe as well. If you are looking for product manufacturing such as gems and jewelry, be confident as India is the second leading world manufacturer in this domain. It is also the top most diamond cutting and polishing hub on earth. In the same way, India stands prominent in several other manufacturing sectors such as machine tools, chemicals, textile etc.

In the technological sectors as well, India is pretty famous for manufacturing of various electrical and electronic products. For IT related products as well, many multiple nationals are looking towards India to out source their product manufacturing to India. What more, giants such as CISCO is considering India for manufacturing its products! It is a great substantiation of the success of product manufacturing in India which has inspired global giants to invest millions of dollars for their product manufacturing here.

Be it communication products, pharmaceutical or textile goods, chemicals or jewelry, product manufacturing in India is without doubt emerging as the best gateway for the Indian and the foreign investors seeking to have promising ROI for their business.

When sourcing products from China comes up as a possibility some pitfalls and negatives must be consider but ultimately profitability usually wins out as the ultimate goal of every business; whether small or large. Surely a company can enjoy abnormal profits when there are few players in the industry and both the industry and company are growing together. As the industry saturates and competition increases it become more and more difficult to win customer’s share of wallet. This is the point when companies seek new ways to lower their expenditures in order to have an edge over competition. One of the best ways to do so is to outsource the products from countries where the cost of production is extremely lower than that of home country of the company.

Outsourcing is the pervasive trend since last few years and there are many Western companies that seek developing economies with technical expertise yet lower cost of production. No wonder, China is the best option for most of such companies.

China manufactures a wide array of products that are outsourced all around the world to many small and large scale businesses. China produces quality goods like garments, machines, electronic goods, spare parts of automobiles, digital cameras, batteries, Plastic ascribes, microphones, blue tooth devices, headsets, CD & DVD players, TVs, LCD monitors and even accessories for the pets to cater the needs of all types of companies.

China is a lucrative market for those who want to reap huge profits but can’t lower cost in their home country. For the past decade China has been the favorite outsourcing destination of companies for reasons listed below:

Exceptional Growth: China has made remarkable progress in terms of its capabilities in manufacturing or production sector with an exceptional growth rate. With the industrial cities like Shanghai and Beijing it has a major impact over other economies. With such a rapid growth rate it is likely to become the main player of the world trade activities in near future.

Reputation: Chinese products bear a good reputation in international markets in spite of propaganda against them that tries to prove these to be low quality goods. Whether these are garments, shoes, daily use items or high technology gadgets, Chinese products are becoming the number one choice of the customers across the globe.

Great understanding of Customers: Chinese wholesalers are very good at understanding the customers’ needs and wants are capable of translating these needs into high quality, low priced tailored products. They are highly responsive and promptly provide product samples, catalogues and delivery quotations.

Low Cost of Production/High Profit Margins: Extremely low cost of production is one of the main reasons for companies outsourcing products from China and lower the cost of production, greater will be the profit margins. Lower cost is characterized by low wage rate, abundant resources and technical expertise of Chinese work force.

An expert in the sourcing world: This era is characterized by outsourcing for many of the businesses across the globe – a blessing of globalization. As a company in the same business for years develops expertise so China has become an expert in the sourcing world – a concept known as economies of scope. This has led to greater innovative designs for all type of products that has been the center of attention of customers all over the world.

The Pitfalls of Sourcing Products in China
The single most important and significant concern sourcing or manufacturing products in China is intellectual property and trademark protection.  The worse case scenario for sourcing is a Chinese company sells you product they have been manufacturing for another company and then you get into big trademark troubles long after you’ve placed orders, sold the product and have inventory.  On the manufacturing side the worse case is the Chinese company sells your trademarked products to other companies or directly worldwide.  The are many other smaller concerns that may be out of your hands such as product and materials quality.

Ways to Manage Risk

Most risks in your relationship with your supplier can be minimized by reliance on a combination of the following:

- make sure a contract is in place.  This is critical!
- make sure the company you are using has a good history of doing business and check always references.
- payment terms that adjust the risk of non-performance to the supplier.
- use of multiple suppliers to mitigate uncertainty and keep price in check.
-  currency fluctuation although generally not significant is a risk worthy of consideration.

A significant risk factor of sourcing from China is the absence of reliable legal remedies if things go south.  With a Chinese supplier, several things are different, even if you sue and win in a US court of law, it’s still probable that you will be unable to collect a judgment from a company who operates in China.  Of source US courts and the authorities will not assist you in enforcing a monetary judgment obtained in the United States in China.

It is possible to sue in a Chinese court, but this has it’s own set of issues. You will need reliable Chinese legal counsel, and the uncertainty of litigation is even greater in China where the legal system is still developing.  Even if you do win, the enforcement mechanisms in China is very weak.

How to Begin With Sourcing Products in China

For a company interested in outsourcing products from China, the first question to be answered is how a manufacturing company in China will qualify to be their supplier. Well, there are a number of ways that can help a company from other country to find the right and legal sourcing company in China. Following is a brief explanation of these options:

Agent based in China: If you are new to China wholesale market perhaps a local China based agent is the one who can help you understand how it works in China. These agents are easy to find in China. They have a fair enough understanding of the market and for a share of profit they can help you in all areas from finding the best supplier as per your requirements to the delivery of products to your home country after checking the quality of products. Also they have good relations with the manufacturers – a feature of great importance in China.

Country-based Agent in China: If you find it difficult to go to China and want to hire some broker or agent who will outsource for you still there is no problem. You can take the help of an agent who is residing in your home country. Just be sure to cross check with the manufacturer before you do some business with them as like other industries scams are no exception.

Internet: Internet can help you in a number of ways in your search of a good supplier. You can search through search engines like Google and Yahoo!; can go through wholesale directories like World Wide Brands, SaleHoo and Doba and web sites like www.alibaba.com www.sourcepoint.com and www.globalsources.com which not only offer product information but also can act as a liaison between you and the manufacturer in China. These sites can also help you find intermediaries in China if you intend to borrow the services of broker or agent.

Other popular options to locate and hire good manufacturers and agents in China include trade fairs and consultancy services firms.

Resources

- The China Business Review: www.chinabusinessreview.com
—Intellectual Property Rights in China: http://beijing.usembassy-china.org.cn/ipr.html

-  The U.S.-China Business Council: http://ww.uschina.org

- U.S. Department of Commerce Office of China Economic Area Intellectual Property Rights In China Webinar Series: http://www.stopfakes.gov/events/china_webinar_series.asp

- The American Chambers of Commerce People’s Republic of China: http://www.amcham-china.org.cn

Competition exists in almost all kind of businesses; it has importance in all fields whether manufacturing, service or trading you always have to work under competitive pressure to draw out the good results. The sole aim of all is to predict the different opportunities and threads in order to enhance the strength of any entity and to remove the weakness prevail in the enterprise, Hence an enterprise always aims to increase the profitability of an organization by utilizing the powers of internal assessments the part of which is the competitor’s analysis.

There are different useful methods to assess the efficient and deficient areas of competitor’s territory.

In order to deal with competitors the company has to perform usually four steps.

1. Identification of the competitors.
2. Ascertain the characteristics of competitors such as:
3. Strategies.
4. Objectives.
5. Strength and weakness.
6. Reaction pattern.

Several points must be taken into consideration while making a wise assessment to beat the competitions.

Identification:

1. The first step should be to recognize the matrices of all relevant competitors in the market so you can make an accurate design and study material for managing the whole process of analysis.
2. You can easily examine competitors by considering various levels such as_ brand, industry, form, generic or by looking at the competition from an industry and a marketing point of view.

Strategies:

1. Identification of the successful products and services, are provided by the competitors to customers.
2. Determine the pricing strategies and terms of different offerings to both industrial and individual customers.
3. The terms and conditions on what the competitors are negotiating with suppliers and distributors.
4. Take a look on current and potential channels of distribution are being utilized by the competitors.
5. Make an assessment on the profitable marketing tools such as_ direct marketing, sales promotions, advertising and personal selling.

Objectives:

1. 1. The company has to take a look on the matter that what is the each competitor seeking in the market place and what drives each competitor behavior.
   2. Different competitors presume some mix of objectives: current profitability, market share growth, cash flow, technological leadership, service leadership, Knowing how a competitor weigh each objective, that will help the company in anticipating its reaction.

Strength and weakness:

1. Analysis of techniques, methods, processes and procedures are employed by the competitors for the satisfaction and attraction of existing and potential customers.
2. Scrutinize the competitor’s advantages that provide the basis for survival in both high growth industry and nitty-gritty world of business.
3. Look at the number of shares that are held and acquired by competitors.
4. Examine the level of loyalty of existing customers towards competitor’s offering_ products and services.
5. Try to make the most of competitors’ weakness while keeping on the track of their strengths.
6. The possible grounds on what the competitors are considered as superior or inferior to other competitors of the industry.
7. Bench marked the competitors against the world class organization to highlight their position in the metrics companies which are expected to procure more profit or loss in the future.

Reaction pattern:

1. Each competitor has a certain philosophy of doing business, a certain internal culture and certain guiding beliefs.
2. Most of the competitors fall into one of four categories.

• The laid-back competitors.
• The selective competitors.
• The tiger competitors.
• The stochastic

c. The company should consider its competitors’ reaction pattern so that right decision can be taken at the right place in the right time.

There is no denial to the fact that no business can survive without customers. Customers hold the central position in all business activities in these modern times. A product starts from thinking about a customer (identifying his obvious or hidden need and catering it) and ends with customer evaluation of that product or service of a specific company. With more and more companies entering a business a customer has more choices that make it more difficult for them to retain a customer over long period of time. This forces an organization to treat its customers in a way to bring them back to them again and again and this customer centricity is the driving force behind the whole philosophy which is termed as customer relationship management.

Customer relationship management refers to managing relations with the customers of a company in way to identify the customers with high life time value and deploy strategies to sustain them over long period of time. It is a sort of information management that enables a company to store information about their potential and existing customers and use this information later while defining strategies in order to attract and reward them. This is done at all levels of the organization and includes all from developing marketing campaigns to target the suspects in an effective way to offering special promotion to loyal customers. Also it aims at serving the existing ones as per their likings to make their experience with the company a rewarding one.

The information may include the name of the customer, contact number, mail and email address, age, date of birth, profession, marital status, purchasing habits and even choices. This is done by maintaining a database of the customers which records information of prospects, existing customers and the most valued customers under above mentioned entities. This data is then processed into information that is accessible to marketing and sales departments so that they can use it timely and in an effective manner and serve the customers in the best possible way.

Customer relationship management is an integrated approach rather than a process. It demands instilling a sense of pleasing the customers on constant basis at all levels of his/her experience with the company. Most of the companies make use of CRM softwares that help them record and process customer data so that it can be mined to be use effectively. Such softwares are available in the market as on-premise CRM software, on demand CRM software, web CRM softwares (SaaS), mobile CRM softwares and open source CRM softwares. Many of the companies fail to realize the importance of this concept and think of installing CRM software to be the whole thing. However, the concept requires a more holistic approach to have long lasting and rewarding results.

Nowadays, business sourcing has been a critical business activity to keep your small business alive in the competition. The competition like it or not, entice the small business owners to jump into the price war. No matter how much we try to resist this, we are exposed in some ways. We all face the recession and less buying power of potential customer, impact of inflation, rising resources cost and overheads too. Business sourcing is the only solution to undertake all these problems.

I remembered times when my comparative business was doing product sourcing. A huge cost of business overhead increased in the form of business sourcing communication and negotiation, not including the business visits to the location of sourcing. All these kind of expenses are unbearable for a small business.

The people living in the age of information are lucky – products, services, materials, equipments and much more things can be out sourced easily and with more affordability than ever, all is the gift of information technology. Small business and large scale corporations should do business sourcing as it is known very well that best value for money resources are residing in Asia (China, India, and Pakistan) specially. Internet technology changed the whole scenario; it reduced the business visits and communication expenses. Direct business sourcing is in trend today.

I often surf the websites to find business sourcing directories. There are some reliable resources on the internet, but since the early days of private labeled rights content, business sourcing directors almost available everywhere. Luckily, some directories do standout, such as complete and updated business sourcing directory, source point.   It has the reliability, and best feature of source point is that way in to thousands of listed businesses is totally free.  No doubt, you would like to find out business from the directory of your choice, and communicate with them. To reduce the cost, internet based communication tools can be used such as Skype. The traditional email communication is still the best way of communication nowadays.

The price bargain would be the next step. But advises for small business owners and professionals is that, they should look for an agent in the country where they can source their products and services. For instance, if you are going to partner with a Chinese or Indian manufacturers, you need to hire an agent to do the manufacturer a visit to confirm and authenticate everything, including products and services quality, quantity and products delivery and transportation matters.