The Study On The Competitiveness Of Dalian’s Service Outsourcing Industry

Service outsourcing is a new industrial transfer within the world following the transfer of manufacturing in the20th century, especially since the economic crisis in2008, more&more enterprises had to begin to develop the service outsourcing strategy and transfer the non-core business to other countries so as to reduce costs. According to the "world investment report2004" published by UNCTAD, service outsourcing has become the main engine of the global transnational direct investment. As the manufacturing country, china is also seizing this good opportunity. In the11th Five-Year Plan of Economic&Social Development of China in2006, it point out we should speed up the transformation of the trade mode, set up some service outsourcing base cities and undertake orderly the international service transfer.in the "2007government report", it stressed that we should vigorously undertake the international service outsourcing and improve our level of service. During the same year, another documents point out clearly that undertaking outsourcing is the highpoint to expand the trade of service.in word, we should change our status from the factory in to the office of world.in recent years, service outsourcing in china has been in a rapid growth with the promoting within some base cities, Dalian has made some achievements to some extent and has become the first one that is awarded as "the service outsourcing base city" on the ground of its superior geographical advantage, abundant humane resources, support from the government&the opportunity. In the rank of Global Outsourcing Transaction INDEX, initiated by IDC, Dalian got the1st place within the china and the5th place in the world.so it’s really worth the title "a new leader in the industry of software&service outsourcing". Nowadays, most of the cities in china have begun to duplicate the mode of Dalian so as to learn some experience and make their economy healthy&sustainable. While with the severe competition from home and abroad such as the BANJIALUOER in India, the advantage of low cost in the second\third graded cities, the developed network&finance service&in Beijing&Shanghai, Dalian has to be faced with the big challenge. Therefore, the research to the service outsourcing industry is very important to Dalian. Besides, because of the development of the service outsourcing industry is relatively maturity compared with other emerging cities, and the problem it has led to can reflect something in common. So it’s useful to study the condition of Dalian and then provide references for other cities. What’s more, it can finally improve the whole competitiveness of service outsourcing industry. But there are some drawbacks in this article. First, because of the data’s limitationThe time span referred to is not very long, but it still can demonstrate the trend. Secondly, I just use the diamond model to qualitatively analysis the condition and to explain it clearly without the reasonable comparison with different cities by using the factor analysis or Econometrics Model. The article is divided into6parts. Firstly, I make a general summary about the relevant theory, such as the theory of absolute advantage, comparative advantage, transaction cost theory and industrial transfer theory and international competitiveness as well as the definition of service outsourcing. Secondly it comes to Dalian’s service outsourcing development in the text of the international and China’s outsourcing trend and point out its problem. The important part of this article is to analysis the competitiveness of Dalian’s service outsourcing from six factors (the production factors, demand conditions, related and support industries, corporate strategy, organizational structure and the competition with the industry, government support and opportunity) on the basis of the Diamond model created by Michael Porter. Then provide the related suggestion to improve the current condition. At last, I get the conclusion that Dalian has the location advantage when outsourcing to Japan, but not enough human resources; regarding the demand, Dalian should explore the potential of Japan and Europe market; as for the related and support industries, Dalian Software hasn’t shown the big radiation effects and agglomeration effects; from the corporate strategy, organizational structure, and intra-industry competition, the initiated advantage of Dalian has been weakened with the strong competition from home and abroad; with regard to the support from the government, Dalian lack the follow-up policy and good feedback system; for the opportunity, Dalian still has a big potential to attract more outsourcing programs.