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 Dellâ€™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.
Think of a “make or buy” decision in the business context through your reading.
1- Describe how that decision was made and the rationale.
2- 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.
It’s important to display critical and independent thinking in your analyses, and please refer to the rubric for details on the evaluation. Length guideline is roughly one page length, and quality of thinking is valued more than quantity, and you are encouraged to use bullet points and short sentences and short paragraphs which cut right to the point.
Rubric is attached with the strategy tool