The Company (e.g., Apple, Samsung): They focus primarily on their core competencies—product design, software development, and marketing. This is what makes their brand unique and drives their revenue.
The Outsourced Task: The physical assembly of the smartphones, tablets, or laptops.
The Outsourcing Partner (Contract Manufacturer): A specialized company (often in countries like China, India, or Vietnam) that owns massive factories, equipment, and a large workforce.
The Rationale:
Cost Savings: Manufacturing in regions with lower labor and operational costs significantly reduces the final product price.
Scale and Speed: The contract manufacturer can produce millions of units quickly, offering a scale and speed that would be difficult and expensive for the tech company to achieve on its own.
Focus: It allows the tech company to dedicate its internal resources and capital to innovation, rather than factory management.
This structure allows the company to sell a high-quality product globally at a competitive price while maintaining control over the most valuable parts of the business—the design and the brand.
📞 Other Common Business Examples
Beyond manufacturing, outsourcing is extremely common for business processes that aren't part of a company's unique value proposition:
Customer Service: A retailer outsources its call center operations to an external provider to handle customer inquiries, technical support, and complaints 24/7. This is often done offshore (e.g., to the Philippines or India) to provide round-the-clock service across different time zones.
IT Services: A mid-sized business may outsource its IT help desk, network management, and cybersecurity to a specialized firm. This gives them access to expert, specialized knowledge without hiring a large in-house team.
Logistics and Shipping: An e-commerce business outsources its entire warehousing, inventory management, and order fulfillment to a third-party logistics (3PL) company like FedEx or a smaller fulfillment center. This frees them from owning and managing physical warehouses.
