Why should a firm consider vertical integration as opposed to simply outsourcing

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Why should a firm consider vertical integration as opposed to simply outsourcing the component parts that go into its final product? What are the advantages of making a product in-house?

Sep 24th, 2015

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A firm can opt to use vertical integration when it seeks to have an increased control its production and distribution processes.it can also do it  when it wants to control costs and improve its production efficiency through reduction of transport expenses and turnaround time.vertical integration also offers an opportunity for gaining a competitive advantage over competitors by blocking other firms from acquiring critical resources as well as accessing important markets.

In-house product making is advantageous because it is flexible and enahces a quick reaction to the market.It also enhances a rapid prototype testing and quick customization.When making a product in house, the costs of producing in low quantities are low hence it is economical

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Sep 24th, 2015

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Sep 24th, 2015
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Sep 24th, 2015
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