Strategic Outsourcing for RLK Media

Outsourcing
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Outsourcing
Although numerous executives are not prepared to outsource, it has become strategic. Currently, a firm’s ownership of capabilities does not matter the most, but rather the ability to make and control critical capabilities, whether they are on the company’s balance sheet or not (Gottfredson, Puryear, & Phillips, 2005). The outsourcing framework that RLK Media should consider is capability sourcing. Capability sourcing is crucial to the case and Lars Inman, RLK Media’s chief executive officer (CEO) should consider using it. RLK Media needs to look for ways to decrease the operating costs by expanding the range of its goods and services. In addition, capability sourcing emphasizes focusing on incremental cost improvement and reevaluating a company’s strategy to capabilities. The first crucial aspect of this strategy is to identify a firm’s components that represent its core of the core (Gottfredson, Puryear, & Phillips, 2005). Another thing that makes the outsourcing framework relevant to the RLK Media case is because the company needed to evaluate whether its capabilities can be achieved by outside suppliers who might achieve other advantages. For sure, RLK Media appears to have focused on traditional products that would not have taken long before new technologies were launched by its competitors.
Capability sourcing has specific aspects that make it appropriate to evaluate the outsourcing decision. Based on Keith Herrington, RLK’s chairman, the company appears to have been prioritizing wrong things that would not have made it recover from its financial crisis. Capability sourcing enables RLK Media to determine if it can work smart by outsourcing services that would enable the company to expand without compromising the quality of its products (Nohria, 2005). When it comes to RLK Media, individuals recognized its high-quality products but they were not purchasing them. Since the consumption pattern had significantly changed, people were no longer interested in buying old products. RLK’s competitors, such as Sony, had better products with current technologies that when launched might see the company out of business. In that light, RLK Media was supposed to be downsizing research and development and outsourcing some of its services that will not affect its capabilities so that the company can take a new direction and change the rule of the game before it was too late (Gottfredson, Puryear, & Phillips, 2005). The firm needed to focus on current technolog...