Dirkjan: Created page with "'Make' refers to a companies decision to manufacture or develop (parts of) a product internally. Reasons favoring 'Make' decisions are: * '''Strong linkage between activities'..."

2020-08-25T07:15:06Z

Created page with "'Make' refers to a companies decision to manufacture or develop (parts of) a product internally. Reasons favoring 'Make' decisions are: * '''Strong linkage between activities'..."

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'Make' refers to a companies decision to manufacture or develop (parts of) a product internally. Reasons favoring 'Make' decisions are:
* '''Strong linkage between activities'''
** If it is crucial for a company to tightly integrate different activities of its [[Value chain|Value chain]] then the activities should be performed internally if it is the only way to achieve such integration.
** Creating these linkages help firms to provide superior customer benefit
* '''Confidentiality of information'''
** Sharing information may undermine the firm's competitive advantage.
* '''High [[Transaction costs|Transaction costs]]'''
** Transaction costs arise because buyers and sellers have diverging interests: the seller wants the highest price, a buyer wants to keep the costs down.To avoid [[Opportunistic behavior|Opportunistic behavior]] a company needs to select the right partner. Factors that determine [[Opportunistic behavior|Opportunistic behavior]] are:
*** [[Asset specificity|Asset specificity]], refer to investments that need to be made in order to setup a transaction between two or more parties. An example is the creation of an electronic data interchange (EDI) system before electron transactions can be made. After choosing a system there is a vendor lock-in.
*** [[Information asymmetry|Information asymmetry]], Often a buyer lacks vital information about a seller because it does not know the track record of the seller and vice versa.
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[[Category:Business]]

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Make - Revision history

Dirkjan: Created page with "'Make' refers to a companies decision to manufacture or develop (parts of) a product internally. Reasons favoring 'Make' decisions are: * '''Strong linkage between activities'..."