Indian Bpos- Waking Up the Philippines Opportunity

1435 Words Jan 3rd, 2013 6 Pages
Indian BPOs- Waking up the Philippines Opportunity
Analysis
The Indian labor market has always been key in globalization, and has been attractive due to its low wages, and the scientific and managerial talent found in the country. The main issues faced in this case mostly stem from the loss of the tax abatement in India, in addition to the weakening US dollar. Due to these two issues, doing business in India versus other fruitful options like Philippines becomes very expensive. These are major challenges to combat for any firm looking to outsource in India. In India, the infrastructure along with the setback discussed around transportation, puts a strain on the bottom line. The Tax abatement ending in 2009 was the initial cause of
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(p. 33). This increase in the cost of BPO outsourcing to India immediately made other locations, such as the Philippines, much more of an attractive destinations for outsourcing. (Deresky, 2011). Pramod Bhasin, CEO of Genpact said it best "The amount of additional I have to bear to do business in India is massive. In the Philippines, I don 't have to spend a dime on transporting employees, a luxury I cannot afford in India". Bhasin implied that companies like his would immediately start to look elsewhere to do business due to rising costs. The Philippines emerging as the most-preferred destination for voice-based BPO. destination is a wake-up call for the larger Indian BPO sector, says Mr V. K. Mathews, Executive Chairman, IBS Group (The Hindu Business Line 2005).

4) How does this case highlight the threats and opportunities facing global companies in developing their strategies? Trends in the marketplace can help determine areas a firm can explore to be successful. Use of carefully considered outsourcing can be a critical component of corporate strategy for any multinational corporation. With outsourcing opportunities in front of them, these corporations should first work to understand the demographics and capabilities of the workforce before making any moves. Companies shouldn 't simply resort to outsourcing and assume it would automatically translate to lower costs. It is important to study labor supply and demand, in order to
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