There are different options for a company to create a product or a service. They can decide to perform activities internally ('Make') or purchase them on the open market ('Buy'). The different options are:
* ''Market transactions''
** Entail the purchase from an external provider on an individual contract basis
* ''Long-term contracts''
** Entail the purchase from an external provider on an contractual basis spanning an extended period of time
* ''Alliances''
** Entail the close co-operation of two separate firms that join up in the production of a product or service.
* ''Parent/Subsidiary constellations''
** Entail the setting up of a distinct firm that operates separately from, yet under auspices of the parent company.
* ''Internal productions''
** Entails a process that is managed completely internally, without any outsourcing
Reasons favoring '[[Make]]' decisions are:
* Strong linkage between activities
* Confidentiality of information
* High transaction costs
Reasons favoring '[[Buy]]' decisions are:javascript:;
* High economies of scale
* High capital requirements
* Specialized know-how
* Higher efficiency of the open market
The [[Clicks-and-mortar spectrum]] spans from integration to separation of a companies business activities. The concept of [[Value chain deconstruction]] is that traditionally integrated value chains get unbundled and are reconfigured due to:
# Separation of the economics or things (physical goods) and the economics of information (digital goods)
# The blow-up of the trade-off between richness and reach.
The concept of [[Unbundling the corporation]] over the internet is similar to value chain deconstruction. The [[Channel conflict matrix]] analyzes how bricks and mortar retailers should react between possible conflict between online and offline sales.

Part of [[Strategies for E-Business]]
Mon, 27 Dec 2010 17:59:15 GMT
Mon, 27 Dec 2010 17:59:15 GMT