To vertically integrate or outsource is a critical strategic decision that can play a big role in a company’s success or failure. On the one hand, we have seen some companies gaining great control and power through vertical integration, from Andrew Carnegie’s integration of upstream and downstream activities in steelmaking in the Gilded Age to Apple’s integration of hardware and software in the current time; on the other hand we see companies gaining advantage through outsourcing, such as Dell’s outsourcing of computer manufacturing. Which model is better, of course, depends on the situation at hand, which includes industry dynamics, company goal, company resources, and nature and role of the activities in question.
After reading Ch 07, think of a “make or buy” decision in the business context through your experience or reading. Describe how that decision was made and the rationale. Then apply the make versus buy strategy tool at the end of the chapter to evaluate that decision and whether you think that was a good decision and why.
Please post your discussion here; a rough guideline is about one-page length, single spaced.
2- CH 7