When is Outsourcing Preferable to Vertical Integration?
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Outsourcing is a business practice that assigns responsibility to another company for business functions that can be processed internally. Vertical integration helps most companies save costs and improve quality over time. The initial process of vertical integration requires a lot of resources, which is difficult for small businesses. The purpose of implementing a vertical integration or outsourcing plan is to improve the efficiency of a company's operations. Vertical integration gives some companies a competitive advantage. Outsourcing is the most practical option for others. The decision to vertically integrate or outsource is influenced by the nature of the company's business and the industry in which it operates.
When is Outsourcing Preferable to Vertical Integration?
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When is Outsourcing Preferable to Vertical Integration?
Outsourcing is a business practice that assigns responsibility to another company for business functions that can be processed internally. Vertical integration helps most companies save costs and improve quality over time. The initial process of vertical integration requires a lot of resources, which is difficult for small businesses. The purpose of implementing a vertical integration or outsourcing plan is to improve the efficiency of a company's operations. Vertical integration gives some companies a competitive advantage. Outsourcing is the most practical option for others. The decision to vertically integrate or outsource is influenced by the nature of the company's business and the industry in which it operates.