'Buy' refers to a companies decision to manufacture or develop (parts of) a product externally. Reasons favoring 'Buy' decisions are: * ''High economies of scale'' ** If an external party can produce the asset for multiple consumers in higher volumes than the firm itself, that party is in a much better position to profit from economies of scale * ''High capital requirements'' ** If the production of a certain good requires a high upfront investment, such as a specific production plant. It may be helpful to find an external partner who already made that investment. * ''Specialized know-how'' ** Due to [[Learning effects]] a company with specialized know how will be able to produce a certain good or service cheaper at higher quality. * ''Higher efficiency of the open market'' ** External parties are forced to be more efficient as they are continuously under competitive pressure.