Why buy (buying component parts of independent suppliers)?

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Why buy (buying component parts of independent suppliers)?



Answer:


- Gives the firm greater flexibility: important when changes in exchange rates and trade barriers alter the attractiveness of various supply sources over time
- Helps the firm capture orders from international customers: can help firms gain orders from suppliers' countries
- Helps drive sown the firm's cost structure: avoids challenged of coordination and control additional subunits, avoids the lack of incentive associated with suppliers, avoids the difficulties with setting appropriate transfer prices

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