Business Analytics for Managers, 2nd Edition

Introduction

Imagine a company. It could be an American manufacturer of home computers. Try to imagine, too, all the things such a company must be able to do: purchasing from suppliers, assembling and packaging the parts, preparing manuals and marketing plans, selling the products. The company also has a large number of support functions. Someone must look after the well‐being of its employees, new staff must be hired, people must be paid, the place must be cleaned, and a canteen must work to feed everyone. There is an entire financial function, ensuring that the crediting and debiting of banks, suppliers, owners, and customers runs smoothly. Finally, there are all the planning processes related to product lines and customer groups on which the company has chosen to focus.

Now imagine how much of this the company could outsource. Without too much effort, all production could be moved to East Asia. That could probably bring huge advantages since assembling computers is typically salary‐heavy and standardized production work. Others could handle the logistic side of things. The company could get professionals to write and translate the manuals. In addition, the company wouldn't need its own outlets; its products could be sold through some of the major retail chains. Alternatively, a Web shop could be commissioned to create an Internet site where customers could order the products they want. There is no real need for the company to have its own warehouse for parts and computers, ...