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Week 2
Erasmus Universiteit · Int. Economics and Business Economics
Y1 - Organisation and StrategyInhoud
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- Reasons to Buy Instead of Make
- 1. Exploiting Economies of Scale and Learning
- 2. Avoiding Agency Costs
- 3. Reducing Influence Costs
- Reasons to “Make” (Produce In-House Instead of Outsourcing)
- 1. Coordination Advantages
- 2. Protection of Private Information
- 3. Transaction Costs and Relationship-Specific Assets
- Side Note: Economic Foundations of Contracts
- Common Misconceptions in Make-or-Buy Decisions
- 1. “Make if the asset is a source of competitive advantage”
- 2. “Buy to avoid the cost of making”
- 3. “Make to avoid paying a profit margin to suppliers”
- 4. “Make to avoid high prices during shortages”
- 5. “Make to control or tie up a distribution channel”
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