Assume that Ford has decided to develop a high-performance,high-quality fuel injection system that no other competitor in the industry can match.Manufacture of these uniquely designed systems requires investments in equipment that can be used only for this purpose-it cannot be used to make fuel injection systems for any other auto firm.What is Ford likely to do in this scenario?

Question

Quizplus · Accepted Answer

In general,we can predict that when substantial investments in specialized assets are required to manufacture a component,the firm will prefer to make the component internally rather than contract it out to a supplier.Substantial empirical evidence supports this prediction.

Assume That Ford Has Decided to Develop a High-Performance,high-Quality Fuel