The Case Study Of Make-or-buy Business Decisions Of Enterprise

With the development of economy globalization, all of the resources including the market and manufacturing are widely distributed and organized around the world. Some companies are highly integrated, but others are much specialized. For example, Osram produces many lighting products and has own sales force to sell the products to end user, but Philips outsource the plants and relying on other suppliers to make the products. Why did some companies choose the vertical integration and what is company strategy and decision making criteria here, while others remain on one area? This is the topic intend to be studied and answered.This thesis firstly introduces the company profile, business development, uses Five-Forces Model of competition analytical tool to introduce the macro environment and competition of the case study. Secondly, the thesis applies the SWOT framework to analysis company strength, weakness, opportunity and threat as well as the core competency of the company. And this thesis demonstrates the real relevant cases on subcontracting and production footprint strategic. Thirdly, according to the analysis of real case, the procedures of make or buy decision is also defined. And this thesis provides the quantitative and qualitative analysis methodology, set up the four criteria for make or buy decision and many key performance index. Qualitative considerations require subjective judgment and often need multiple opinions for long run; Quantitative considerations can be calculated and compared as financial data. At last, the conclusions and suggestions are presented to the company for strategy and decision of make or buy: Under a dynamic change in the market, it requires Osram adapt the different make or buy decision strategies and focuses in different market segments in order to enhance the core competence of the company. The different business have the unique focus on the make-or-buy decision, the traditional business focus on providing the positive cash flow to the company, while LED business focus on gaining core competence and market growth from future perspective.