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1.4 Make or Buy? Two strategic alternatives

To the inside of the analyses of strategic character, still before that economic (costs/benefits analyses), of creation of a durable and defensible competitive advantage, open for the corporate structure two possible roads, the choice of which strongly are conditioned from the technological member.
On one side there is the solution of the specialization. The enterprise is concentrated in its Core business, that is esternalizza and resorts market pure for all that series of connected activities but not re-entering in the typical activity of the entrepreneur taken in consideration, and not decisive in the creation of value for the same company.
The enterprise is taken advantage therefore of a flexible slim organization and to the market turbulences, and is therefore ready to face in more effective way the negative conjunctures.
Web ago sure the its part, facilitating the entrepreneur in the actions of Market Intelligence, that is in those actions that carry to the finding of the best present conditions than supplying on the market and that they allow the discouragement of the transaction costs.
Supplyings, of closely transaction nature, take advantage, in this case, the economies based on the acquired amounts, and in any case they determine bottoms costs of switching from a supplier to the other.
However, the solution of the market resource (Buy), also allowing upgrades approached them the innovation, it grants to the entrepreneur little space to the differentiation possibilities, since putting into effect transactions spot, these it is based in decisive way on standard of market (you see figure 2).
To the contrary, with the choices of Make (figure 2), is gone towards the vertical integration.
The enterprise adopts a more rigid and hierarchical organization, than but it allows them to benefit of one greater possibility of differentiation and personalization of just prodotto/servizio.
The smaller flexibility therefore is accompanied from greater costs (not in all the fields), had minor to the efficiency of the production process, that it represents most times the higher price to pay.
Company takes advantage in this case, of control exclusive of technology, that he is congenital to the type of activity that the enterprise carries out, through the software use on measure, to times also owners.

Figure 2: Two strategic alternatives 4

The choice that orients the entrepreneur towards one of the two strategic options is conditioned from various factors, that I go of continuation to illustrate:

1.4.1 Descriptive complexity and specificity of the member to purchase

The descriptive complexity limits the convenience of the outsourcing from part of upgrades them customer, and is given from elements that increase the costs of transaction for the customer, in particular

  • The costs of search and selection of the supplier,
  • The costs of verification and control,
  • The costs of switching,
increasing the market risks and stimulating to the hierarchical control (figure 3), that it will carry to the vertical integration. Elements that record in the descriptive complexity can be:
  • Ambiguity,
  • Uncertainty,
  • Risk of opportunismo from part of the entrepreneur
The specificity of the member instead, limits the effective possibility that a market of supply exists adapted to the requirements of the entrepreneur, for which, it can demand investments on measure that they carry to a internalizzazione/integrazione process (figure 3) of the activities, like:
  • Planning ad hoc,
  • Investments in technologies, processes and systems specialize to you,
  • Productive ability dedicated to the customer

Figure 3: Incidence of the complexity and the specificity of the member in the choices of make or buy

In this case the impact of the ICT will carry, in the way in which I will explain better later on, to one cost reduction of transaction pushing the entrepreneur towards one chosen of market.
Chosen that I will illustrate in the successive paragraph (theory of the transaction costs).
The same effect will be had with the introduction of flexible technologies, that smaller specificity of the investments to member parity demands therefore one.
Technologies as the solutions of Enterprise Resource Planning favor, through the fast availability of information, flexible models of production like as an example the Just in Time.
However, in case of widening of the technological base of the products, continuation from an increase of the descriptive complexity of the members, the choices of the entrepreneur however will be oriented towards the vertical integration.

  • Notes 4: G. Thorn, Management of the Sypply Chain and Web Economy, Milan Polytechnic


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