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When a large retailer asks a company to manufacture a product so that it can be sold at a low(er) price point, the company is often constrained to outsource its production overseas. Such a phenomenon is called the ____________________.

User Salhin
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Final answer:

The phenomenon of a company outsourcing production overseas at the behest of a retailer for lower pricing is known as offshoring. Outsourcing involves contracting outside firms for services and can also be implicated in global cost-saving strategies that affect employment and product pricing.

Step-by-step explanation:

When a large retailer asks a company to manufacture a product so that it can be sold at a lower price point, and the company is constrained to outsource its production overseas, this phenomenon is known as offshoring. Offshoring is the process of moving some of a company's operations overseas to access cheaper labor markets. In contrast, outsourcing is the process of hiring outside contractors, sometimes abroad, to perform tasks a company once performed internally. Both practices have become prevalent due to globalization, trade agreements like NAFTA, and consumer demand for lower-priced goods, despite the consequence of job displacement in developed countries and the harmful conditions for workers in offshored factories, as seen with sweatshop controversies.

User Ebrahim Karam
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