Framework for Evaluating Make-or-Buy Decisions PPT

This PPT slide, part of the 23-slide Make-or-Buy Decision Analysis PowerPoint presentation, outlines key decision criteria for evaluating make-or-buy decisions within an organization’s corporate strategy. It presents a comparative analysis between in-house production and outsourcing, emphasizing 4 critical factors that influence this choice.

The first criterion, "Attractiveness of the process/business," highlights the importance of differentiation. If an in-house process distinctly enhances the product or service, it may warrant keeping operations internal. Conversely, if the outsourcing option is unattractive due to challenges like labor shortages or regulatory issues, it may push the decision towards in-house capabilities.

Next, "Critically for overall business success" focuses on synergies. If the capability aligns well with existing business processes and enhances overall performance, in-house production is favored. Outsourcing may be less appealing if the materials or processes do not contribute significantly to the end products.

The third criterion, "Industry dynamics and competitive positioning," examines market conditions. A hostile supply market may necessitate in-house operations to maintain control, while a favorable supply environment could make outsourcing more viable, especially if partnerships can be developed.

Lastly, "Dynamics of the technology or capability" considers the pace of technological change and risks to core competencies. If there’s a need to innovate or push technological boundaries, in-house capabilities might be essential. On the other hand, if suppliers can meet innovation demands effectively, outsourcing could be a strategic choice.

This slide serves as a framework for decision-making, guiding organizations in assessing whether to retain capabilities internally or seek external partnerships based on strategic alignment and operational needs.

This slide is part of the Make-or-Buy Decision Analysis PowerPoint presentation.

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Make or Buy Core Competencies Corporate Strategy Decision Analysis Innovation Production Positioning

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