Low Cost Country Sourcing - 3 Factors to Consider

Low cost country sourcing (LCCS) has become a mandatory strategy for the businesses in all industries and markets.  Procurement has become the major focal point for every business. Dwindling consumer base, competitive pressure, high market demands, low-profit margins and the list of challenges can go on and on. LCCS is one popular way to cut the costs across the supply chain.

The challenges you could face in low cost country sourcing. and why you need a professional consultant to handle the work for you.

Removes the barriers:

Communication can be a major hurdle in many of the developing countries. the language, culture, lifestyle etc everything is different. Using a third-party consultant can remove some of the geographical and linguistic hurdles that the manufacturing firms find in the LCCS markets like India, Thailand, China, Brazil etc.

Supplier capacity:

Identifying the right candidates can be more challenging than it sounds. You must consider the quality of material, the supplier capacity to deliver- the volume they can deliver, can they scale the supply during peak times? You must have an alternate plan ready in anticipation of the worst.  A local consultant will be the best choice for you.

Risk factors:

You must check the risks- political stability, economic unrest, labor, exchange fluctuations, transportation, local taxation policies etc. A wrong move can eat away all the savings you were hoping to make.

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Saving Opportunities with Low Cost Country Sourcing India

Businesses in every industry is feeling the pressure of escalating costs, fierce competition, and consumer demands. The local markets and traditional procurement approach is not as effective as it was. Focus is shifting towards a new strategy of going beyond the borders to capitalize on low cost country sourcing (LCCS). Enterprises from the developed nations purchase the raw material and finished goods from emerging nations like India.

Why India:

There are many ways the enterprises can benefits with low cost country sourcing India procurement deals.

Significant savings with high-quality services:

The costs in India is much lower than many of the other developing nations. The quality of materials and supplies is far superior.

Government initiatives:

India is developing at a brisk pace. The country is politically and economically stable. The government is encouraging foreign investments and has a liberal; import export policy. 

Plenty of talent and resources:

Perhaps the biggest advantage of low cost country sourcing India is the flexible and affordable manpower.  While you can save upto 30 to 50 % on skilled labor, the savings in unskilled labor can go upto 75 to 90 percent.

The risk factors:

LCCS has its own challenges and risks which could at times mitigate the savings you otherwise could make. The risk factors include defective products. transportations delays, import duties, and currency fluctuations. 

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4 Strategies the Mergers and Acquisitions Advisory Company in India Takes for a Perfect solution

The mergers and acquisition advisory company in India use their expertise in developing a coherent M&A strategy. One of the primary tasks is to determine the buying company’s financial viabilities.  With some diligent analysis and in-depth studies, they deliver a range of options to pave the way for a seamless and profitable merger or acquisition.

1. Strategy:

Identify the target companies and allow the parties to choose the medium and structure of acquisition. it is not a simple job and needs some careful planning, assessments, and study the financial implications.

2. Valuation:

After taking a decision of the structure of the transaction, the experts in the  mergers and acquisition advisory company in India  will evaluate the swap ratio (in mergers) and setting the cash flow and other factors precise to the assessment for the acquisition.

3. Execution:

they have the experience and understand the obstacles that are possible on the way.  This includes delays in getting approvals, sanctions, and any other from the different governing bodies.

4. Negotiation:

To have a successful transaction, careful and diligent planning is a must. The minutest of issues must be attended to and an alternate solution is kept ready.
The M&A professionals will assess each case as it comes and puts up the best strategies specific to that deal.

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