What business strategy focuses on reducing costs through international sourcing?

The focus of Low-Cost Country Sourcing (LCCS) is to achieve cost reduction by sourcing goods and services from countries where production and labor costs are significantly lower than in the domestic market. This strategy is particularly effective for companies looking to enhance their competitive edge by lowering overall expenses while maintaining acceptable quality levels in their products or services.

LCCS involves identifying and evaluating suppliers in low-cost countries, understanding the total cost implications including logistics, tariffs, and potential risks such as political instability or quality assurance issues. By leveraging the cost differential between countries, organizations can optimize their procurement processes, ultimately resulting in lower prices for consumers.

Other strategies, while related to efficiency or cost management, do not specifically emphasize international sourcing as a primary approach. Lean Management focuses on streamlining processes and eliminating waste to improve overall efficiency, whereas Value Engineering seeks to improve product functionality and reduce costs simultaneously without sacrificing quality. Target Costing, on the other hand, involves setting a target cost for a product based on market conditions and then working backwards to achieve that cost through design and manufacturing efficiencies. While these strategies may intertwine with cost management, they do not directly encapsulate the international sourcing component that is central to Low-Cost Country Sourcing.