What are the advantages of outsourcing non-critical and sometimes even critical value chain activities?

Question

What will be an ideal response?

Answer 1

Aside from the fact that an outsider, because of its expertise and specialized know-how, may be able to perform certain value chain activities better or cheaper than a company can perform them internally, outsourcing can also sometimes make a positive contribution to strategy execution. Outsourcing the performance of selected activities to outside vendors enables a company to heighten its strategic focus and concentrate its full energies on performing those value chain activities that are at the core of its strategy, where it can create unique value. Wisely choosing which activities to perform internally and which to outsource can lead to several strategy-executing advantages-lower costs, heightened strategic focus, less internal bureaucracy, speedier decision-making, and a better arsenal of organizational capabilities.