Extensive outsourcing contributes to the firm's core competencies and helps the firm transfer those competencies to other business units in the diversified firm.

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Extensive outsourcing can lead to a loss of core competencies and knowledge within the firm. It may also create dependencies on external partners and limit the ability of the firm to innovate and differentiate itself from competitors.

Extensive Outsourcing Contributes to the Firm's Core Competencies and Helps