Definition: A make-or-buy decision determines whether a product or service is produced in-house (make) or outsourced (buy). This is also referred to as outsourcing.
The make-or-buy decision can be operational or strategic. Operational refers to a shorter period of time and is more cost-oriented. Reasons for an operational make-or-buy decision can be a lack of know-how or a lack of resources. Example: "It is cheaper and quicker to buy a finished product on the market instead of spending a lot of time developing it yourself".
Strategic make-or-buy decisions are long-term and can be very complex. As a rule, it is not about a product or a service, but rather, for example, about a company completely outsourcing a branch of work in order to concentrate on its own core business.
The make-or-buy decision is preceded by a make-or-buy analysis, the aim of which is to find out which decision will help the company to (better) achieve its goal. The advantages and disadvantages of both alternatives must be carefully examined.
Further references:
https://www.econsor.de/online-marketing/online-marketing-news/make-or-buy/
https://de.wikipedia.org/wiki/Eigenfertigung_oder_Fremdbezug
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