Outsourcing is simply the transfer of services to third parties. Offshore outsourcing is mostly used in IT-related activities for which the Internet plays a vital role along with work related to sales and marketing, finance, human resources and administration, etc. Quality and effective risk management are two integral parts of offshore outsourcing services. Offshore outsourcing allows companies to reduce costs, gain staff flexibility and increase revenue, gain a competitive advantage, decrease cycle times, increase shareholder value, improve customer loyalty and ultimately enables a company to focus on its core competencies. An example of offshore outsourcing is the very well-known clothing company called Gap Inc. which outsources its production from Indonesia to reduce costs and gain an advantage in the global market. WESTERN COMPANIES: brands such as Armani, Polo, Nike, GAP etc. they have their manufacturing units in emerging markets like India, China, Thailand, etc. Cost reduction is one of the main reasons why Western companies from USA, UK, France opt for outsourcing. Outsourcing activities that involve high indirect costs generates cost reductions. Costs incurred for recruiting, motivating and training staff are reduced due to the difference in currency value. One such company is Louis Vuitton, a French brand that outsources its processes from emerging countries such as India and China. The time difference between companies allows production to take place 24/7. Outsourcing allows you to redeploy resources to key areas of the company that have a direct impact on profitability. Countries where taxation and government regulations are unfavorable, explore other countries where the same...... middle of paper...... explained. Available: http://ezinearticles.com/?Meaning-of-Offshore-Outsourcing-Explained&id=3675615. [Accessed March 13, 2011].• McDaniel,R. 2010. The Benefits of Outsourcing for Nike. Available: http://www.ehow.com/list_7704795_advantages-outsourcing-nike.html. [Accessed March 18, 2011]• Needle,D. 2004. Globulation. In: Paoli,L. and Cooke, A. Business in Context. 5th ed. Hampshire: Rennie, T. PP.22-23.• Publisher. 2009. IBM and Microsoft Virtualization. Available: http://www.microsoft.com/virtualization/en/us/partner-profile-ibm.aspx. [Accessed March 16, 2011].• Overby,S. 2007. Outsourcing Definition and Solutions. Available: http://www.cio.com/article/40380/Outsourcing_Definition_and_Solutions#1.[Accessed March 17, 2011].• Verticals . 2008. Work shifts. Available: http://www.bpowatchindia.com/BPODemystified.html. [Accessed March 17 2011].