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It is true, if the business model, formula and solution should be therefore worked out from the intersection of “outsourcing of services” and “lack of professionalism”, then the franchising – mainly characterized by the outsourcing of services to experienced and established central administrative offices – seems to be the fittest arrangement for the compliance with: a) the three mentioned factors; b) the fourth factor: the “familiarity with the product” whose positive relationship with the startup rate has meanwhile also been demonstrated . Although franchising arrangement seems theoretically very suitable to address all the four factors, it does not mean that it practically and automatically shall represent a successful business strategy for all the market areas and industry sector. In other words, despite franchising is thought to: a) Strengthen the B1 (factor 1). This is true especially for IAF (factor 4). These WBE, in fact, can count on the support of well established and proven business practices which increase the feeling of stability in relation to the commercial activity to be launched; b) Allow to predict good performances. It is clear how this (new) component is strictly connected to B1: the feeling of stability in fact is conferred, other than the professional support of franchisor managers, also by the positive data concerning franchised units; c) Facilitating the AF. Financial institutions can be more easily convinced when taking into consideration both the professional support and the prospective performances of the new business; Still its successfulness as business strategy must be studied within the peculiar Italian Food Service Industry. That is to say, it is necessary to make another intersection. Accordingly, part II of the study sets out with a deeper analysis of the Italian Food Service Industry. After a general introduction, the analysis moves towards the relevant single sub-sectors: Restaurants (including all the sub-subsectors), Cafeterias and Bakery Industry. Being rather concerned with individuals as consumers, the discussion reveals how the relationship between Franchising and Italian Food Service Industry is quite different from the relationship between the former and Food Service Industry of other countries such as South Korea and United States. The weak success of franchising in the Italian Food Service Industry can be explained by the existence of a well rooted gastronomic culture which still prefers and pays attention to the artisanal dimension of the product rather than on other side aspects which franchised units are used to emphasize. Despite such general observation, the paper demonstrates how macroeconomic factors such as the financial crisis as well as cultural ones – included a progressive weakening of the mentioned gastronomic culture – are creating certain suboptimal equilibriums that can be successfully filled up by franchising agreements. In particular, a special interest is expressed in relation to the bakery industry- a sector of stores which is still not very developed in Italy, but very developed in South Korea, US and Australia through franchising schemes. The author, in fact, provides some observations underscoring business opportunities of South Korean bakery house franchisors in the Italian market. The qualitative and quantitative data that have rendered feasible Part II analysis have been drawn out from documentation provided by the national association of entrepreneurs in the Food Service Industry (FIPE), the Sole 24ORE, the Italian franchising association as well as other academic and scientific journals. References will be available upon request. Tenth Annual International Daejeon, South Korea P a g e | 34 Smart Sourcing Conference June 28-29, 2012
PRODUCTION OFFSHORING FOR A US SUBSIDIARY MANAGED BY A SAUDI-BASED BUILDING MATERIALS DISTRIBUTION COMPANY: AN ECONOMIC ANALYSIS CASE STUDY Archana Shankarnarayanan, Gopalakrishnan Easwaran, Abdulwahab F. Anbar St. Mary’s University, One Camino Santa Maria, San Antonio, TX 78228-8534 Email: geaswaran@stmarytx.edu ABSTRACT We consider a distribution subsidiary (DS) in Texas that is managed by a family-owned parent company located in Saudi Arabia. The DS sells and distributes building materials such as wooden doors and cabinets. The production of doors and cabinets is contracted to manufacturers located within Texas. However, a significant decline in revenue due to the recent crash in the US housing market forced the management to engage in desperate cost cutting measures that included offshoring of production activities to a low cost manufacturer located in Saudi Arabia. We perform economic analysis for this setting involving the US-based subsidiary and the Saudi-based parent companies by estimating the relevant cost components and incorporating factors such as the corporate and import/export taxes, international shipment costs, inflation rates and currency exchange rates. Based on the results of our analysis, we infer that offshoring of production activities is an economically viable alternative for the company. We further present our views on the impact of the offshoring strategy on the performance of the company’s supply chain. Keywords: production, distribution, off-shoring strategy, economic analysis, supply chain management, international business, logistics, international tax, and financial statements. Archana Shankarnarayanan is a post baccalaureate student in accounting at St. Mary’s University. She has a bachelors and a master’s degree in commerce from R. A. Podar College of Commerce and Economics. Shankarnarayanan’s research interests include transfer pricing in supply chains, business taxation, auditing and corporate governance. Gopalakrishnan Easwaran, Ph.D., is an assistant professor of industrial engineering at St. Mary’s University. His research interests include supply chain management, applied optimization, ERP & business intelligence systems, scheduling and sequencing. Easwaran has industry experience from consultancy research projects for a variety of firms including Hindustan Aeronautics Limited (India), Defense Research and Development Lab (India), Master Halco, Frito-Lay, PepsiCo, Solid Waste Management Department of San Antonio, and Laredo Development Foundation. He has published papers in journals such as Applied Mathematics and Computation, IIE Transactions, Interfaces, Naval Research Logistics, and Transportation Science. Abdulwahab F. Anbar is a graduate student in the engineering systems management program at St. Mary’s University. Anbar’s interest includes international supply chain management, corporate finance and lean production. He will be joining Puba Insurance Company in Saudi Arabia as a manager after his graduation. Tenth Annual International Daejeon, South Korea P a g e | 35 Smart Sourcing Conference June 28-29, 2012
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Page 7 and 8: Dear Conference Participants: I wou
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Page 15 and 16: Contemporary Issues and Challenges
Page 17 and 18: Introduction Outsourcing is contrac
Page 19 and 20: In this way Big Business is on the
Page 21 and 22: Introduction and Literature Review
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Page 25 and 26: giving weight to the sub criteria,
Page 27 and 28: Abstract Secrets of Competitiveness
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Page 33 and 34: ENTREPRENEURSHIP IN TIME OF CRISIS:
Page 35: GENERAL ASPECTS A B ... X Y W Z Asp
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Page 41 and 42: Mitigating the Impact of Managerial
Page 43 and 44: a proportion of initial cash flows;
Page 45 and 46: Sourcing of Digital Content: Its Im
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Page 49 and 50: The Impacts of Organizational Cultu
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Page 57 and 58: Customer Satisfaction on IT Outsour
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Page 61 and 62: INTRODUCTION: Healthcare Informatio
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Page 73 and 74: Annual Global Outsourcing Quiz Bowl
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Often, however, feasibility studies
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