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Step-by-step explanation:
CHAPTER 7 Vertical Integration and Outsourcing LEARNING OBJECTIVES Studying this chapter should provide you with the knowledge to: Define vertical integration, forward vertical integration, and backward integration. Describe the three Cs that represent the primary reasons that firms choose to vertically integrate (make) and perform an activity internally versus outsource (buy) the activity to (from) a supplier. Describe the two Fs, which examine the potential dangers of vertical integration. Explain the advantages of outsourcing and the conditions under which it might be advantageous to outsource an activity to an external supplier. Discuss the actions a manager could take to prevent a subcontractor from becoming a competitor. Dell and ASUS: A Tale of Two Companies Image of DELL. Dell began in 1984 with a simple idea in mind: create and deliver custom personal computers (PCs) directly to customers within 48 hours. What started in Michael Dell’s dorm room at the University of Texas, Austin, grew to a Fortune 500 company in less than a decade.1 Moving inventory quickly without the