Build versus buy

A build-versus-buy decision is a strategic choice when deciding whether to produce a product or service internally or purchase it from an external supplier. It’s a cost-benefit analysis (CBA) to determine the most effective way to acquire a needed component or service.

Table 9.7 details the pros and cons of the build-versus-buy approach.

	Build	Buy
Pros	Greater control over quality and production processes Potential for cost savings if production is efficient Protection of intellectual property (IP) Increased flexibility to adapt to changing needs	Lower upfront costs Access to specialized expertise and economies of scale Frees up internal resources for other activities Reduces risks associated with production and inventory management...