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Make-or-Buy, Deconstrion of the Value Chain & E-Purchasing

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1. Describe the different organizational options along the "make-or-buy" spectrum.
2. Formulate your opinions on why a company should consider deconstructing its value chain over the Internet.
3. Explain the online/offline channel conflict matrix and illustrate it through specific examples.
4. Compare the advantages and drawbacks of e-purchasing systems.
5. Give the trade-offs that companies need to make when choosing between different types of e-procurement solutions.

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The response addresses the queries posted in 1618 words with references.

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The response addresses the queries posted in 1618 words with references.

In the organizational functioning, different concepts are used by the business people. These concepts are used by the business organizations to make improvements in their overall business process for their significant uses. In this context, it is good to have deep understanding of some such concepts. In this context, the following discussion will include different organizational options, along with "Make or buy" spectrum.

Different organizational options along "make-or-buy" spectrum:

"Make- or-buy" spectrum involves whether the goods or services will be produced by the organization itself or some other organization. Most of the organizations have different options along "make-or-buy" spectrum, such as they can incorporate the activity into their management system. Moreover, they can also go for extending their business and involving with other firms or organizations. A bundled outsourcing, on the other hand, helps the suppliers improve the performance of their product, in terms of quality and quantity, as well as strengthen their assets related to the transactions (Leondes, 2002). This acts as a benefit for the suppliers as they have stable transactions, development of required skills and above all, serve as a competitive edge for their competitors.

On the other hand, suppliers can opt for internet as a source of extending their business. They can sell their products on internet bypassing the retailers. They can also set up franchise and sell their products in a more appropriate way. In terms of production process, the suppliers in the organization can go for production by other firms or they can subcontract some of the parts to other firms. Build operate transfer (BOT) and Run to Outsource (RTO) also serve as options for make-or-buy spectrum. In the context of BOT, an off shore centre is done by the third party and both BOT and RTO help in easy financial services (Macher & Mowery, 2008). This is because the operational processes are easy to conduct and the inventory management system is maintained.

Deconstructing value chain means reorganizing the components and then delivering the products to the customers. In this context, the following section discusses certain significant features of deconstruction of value chain over the internet.

Deconstructing its value chain over the Internet:

Deconstruction can be defined as the process of differentiating products and services into the respective components parts and then reconstructing them in order to gain value. Value chain serves as a competitive edge for most of the organizations. In terms of information technology, value chain helps in generating, processing and communicating the information. Deconstruction of value chain ...

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  • MBA (IP), International Center for Internationa Business
  • BBA, University of Rajasthan
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