A characteristic of outsourcing is
A) completely unrelated to vertical integration
B) likely to be profitable exactly when vertical integration is profitable
C) it prevents a firm from focusing on its core competencies
D) can allow for the exploitation of differing degrees of economies of scale at different points in the supply chain

Question

Quizplus · Accepted Answer

Outsourcing allows firms to focus on their core competencies while still benefiting from economies of scale in other parts of the supply chain. By exploiting differing degrees of economies of scale at different points in the supply chain, firms can minimize costs and increase efficiency. This characteristic of outsourcing is related to vertical integration, but outsourcing is not completely unrelated to it. Outsourcing can be profitable even when vertical integration is not, as it allows firms to leverage the expertise and cost savings of external partners. Outsourcing also does not prevent a firm from focusing on its core competencies, but rather enables it to do so by freeing up resources to focus on those areas.

A Characteristic of Outsourcing Is