Services outsourcing: Marketing strategy and the internal competitor

As corporations look to concentrate on core competencies, the likelihood of outsoiii-cing various business services increases. The outsourcing phenomenon represents a significant market opportunity for suppliers of business services. However, the outside supplier often finds that his major competitor, the internal service provider, is part of the outsourcing evaluation team. Furthermore, the internal provider may have significant influence in his/her role as the in house functional expert. This study investigates the viewpoint of the in house provider visa-vis outside suppliers in the context of warehousing, a pure business service. The study finds that outsourcing does not take place where the in house expert perceives a wide gap between internal and external service capabilities.