Outsourcing:
A) eliminates the need for a value chain.
B) reduces the firm's dependence on its value chain.
C) reorders the steps in a firm's value chain.
D) moves some value chain activities outside the firm.
E) strengthens the firm's capabilities in each value chain function.

Question

Quizplus · Accepted Answer

Outsourcing involves shifting some of the activities of a firm's value chain to be performed outside of the firm, typically by a third-party vendor. This can include functions such as manufacturing, customer service, and IT support. By outsourcing, the firm can often reduce costs, take advantage of specialized expertise, and focus on its core competencies. However, outsourcing also means that the firm becomes more dependent on external partners and must carefully manage these relationships to maintain the quality and efficiency of its value chain.