CHAPTER 2: MAKE OR BUY?
The make or buy conundrum
This chapter is not a definitive exploration of the make or buy decision that will necessarily entail a range of business disciplines:
- Finance.
- Return on capital and breakeven analysis.
- Investment required.
- Market realities (Porter’s Five Forces) (SWOT).
- Sunrise or sunset technology.
- Our own technical competencies.
- Opportunity costs.
- Management time.
- Supplier dynamics and capabilities.
For procurement professionals there will, in addition, be certain issues around competitive leverage, buy-sell dynamics, negotiating power, supplier positioning (Kraljic) and customer account attractiveness. This latter one boils down to how attractive is my company as a potential client to the potential supplier ...
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