How managers make sourcing decisions about low cost regions: Insights from perceptual mapping

This exploratory study combines in-depth interviews with survey data from sourcing managers to provide insights into the evaluation process used in deciding whether a particular country or region is a good sourcing option. Using the survey data we construct a multidimensional perceptual map of sourcing managers' perceptions of low cost regions. As expected, we find that cost and reliability are key criteria used by sourcing managers, but other factors such as intellectual property protection also come into play. Thus, the evaluation process seems to be more nuanced than typically portrayed in the literature, and these nuances have direct implications for marketing and regional development professionals in low cost regions.

Research Highlights
► Low cost regions are rated first on reliability, then on cost vs. knowledge protection.
► Coastal China remains the highest rated region, while Russia and Africa are lowest.
► Asian and Western managers differ in perceptions of low cost region attributes.