What is a potential strategic effect of outsourcing on core competencies?

• A. It allows management to focus on core production rather than waste disposal.
• B. It shifts focus to non-core activities exclusively.
• C. It eliminates the need for any core competencies.
• D. It reduces investment in all product lines.

Answer: (A)

Outsourcing frees a company to concentrate on its core competencies—the activities that drive its competitive advantage. By handing off non-core tasks, such as waste disposal, to specialists, management can redirect time, resources, and strategic focus toward core production and other differentiating activities. This makes core operations stronger and more efficient because the organization isn’t juggling peripheral functions.

The other ideas don’t fit because outsourcing isn’t about shifting attention entirely to non-core tasks, it doesn’t erase the need for core competencies, and it doesn’t automatically reduce investment across every product line.