'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]] 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 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]] a company needs to select the right partner. Factors that determine [[Opportunistic behavior]] are:
*** [[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]], Often a buyer lacks vital information about a seller because it does not know the track record of the seller and vice versa.
bag
businessmodelling_public
created
Sun, 19 Sep 2010 09:33:08 GMT
creator
dirkjan
modified
Sun, 19 Sep 2010 09:33:08 GMT
modifier
dirkjan
tags
Business
M8
Modeling
Term
creator
dirkjan