The Travel Store
The Travel Store is facing a dilemma because it tripled in size over the past three years and finds its online sales escalating beyond a billion dollars. The company is having a hard time continuing with operations because its business processes can’t scale to meet the new demand. In the past six months, sales and profits have dropped and the stock price is plummeting.
The Travel Store is determined to take quick and decisive action to restore profitability and improve its credibility in the marketplace. One of its top priorities is to overhaul its inventory management system in an effort to create optimal levels of inventory to support sales demand. This would prevent higher-volume stores from running out of key sale items while also ensuring that lower-sales stores would not be burdened with excess inventory that could be moved only at closeout prices. The company would like to outsource this function but is worried about the challenges of transferring the responsibility of this important business function as well as the issues surrounding confidentiality and scope definition. List the competitive advantages outsourcing could give The Travel Store and recommendations for addressing the company’s outsourcing concerns.