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1.1. The case study reveals that even the biggest companies buy some parts of their project scope from outside companies. Discuss reasons why companies may choose to "buy" instead of "making" their own work.

1.1. The case study reveals that even the biggest companies buy some parts of their project scope from outside companies. Discuss reasons why companies may choose to "buy" instead of "making" their own work.

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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The difficulties of procuring services as a Fortune 500 company When you're engaged with the management of a business, the tasks associated with procuring reliable services come full with their share of challenges, and this is true no matter how large the organization is that you are working for. With that acknowledgment out of the way, it should come as no surprise that the tasks associated with procuring services for a Fortune 500 company are fraught with potential hurdles. Even more haunting is the potential for procurement mistakes to resonate throughout such vast operations, so every ounce of caution should be exercised before any decisions are made. For starters, to be ranked amongst the Fortune 500, regardless of position on the list, means that a company is both undeniably massive and an unqualified success. In 2019, the occupant of position number 500 on the list, the venerable Levi Strauss, accumulated more than $5.5 billion in total revenue. In the process, Levi Strauss beat out the 501st company - Avon Products by only $4 million to earn its spot on the cherished grouping of gargantuan money-makers. To further put that into perspective, modern corporations can't even sniff distinction as a Fortune 500 company without amassing revenues that exceed the GDP of nearly 20 percent of the world's countries. Collectively, Fortune 500 companies account for two-thirds of the U.S. GDP, which amounts to $13.7 trillion in revenues to go along with $1.1 trillion in profits and $22.6 trillion in overall market value. They also employ 28.7 million people worldwide, which means that the composition of workers employed by Fortune 500 companies, if lumped together as a single nation, would rank as one of the 50 largest countries in the world in terms of overall population. 1.1. The case study reveals that even the biggest companies buy some parts of their project scope from outside companies. Discuss reasons why companies may choose to "buy" instead of "making" their own work.
Transcribed Image Text:The difficulties of procuring services as a Fortune 500 company When you're engaged with the management of a business, the tasks associated with procuring reliable services come full with their share of challenges, and this is true no matter how large the organization is that you are working for. With that acknowledgment out of the way, it should come as no surprise that the tasks associated with procuring services for a Fortune 500 company are fraught with potential hurdles. Even more haunting is the potential for procurement mistakes to resonate throughout such vast operations, so every ounce of caution should be exercised before any decisions are made. For starters, to be ranked amongst the Fortune 500, regardless of position on the list, means that a company is both undeniably massive and an unqualified success. In 2019, the occupant of position number 500 on the list, the venerable Levi Strauss, accumulated more than $5.5 billion in total revenue. In the process, Levi Strauss beat out the 501st company - Avon Products by only $4 million to earn its spot on the cherished grouping of gargantuan money-makers. To further put that into perspective, modern corporations can't even sniff distinction as a Fortune 500 company without amassing revenues that exceed the GDP of nearly 20 percent of the world's countries. Collectively, Fortune 500 companies account for two-thirds of the U.S. GDP, which amounts to $13.7 trillion in revenues to go along with $1.1 trillion in profits and $22.6 trillion in overall market value. They also employ 28.7 million people worldwide, which means that the composition of workers employed by Fortune 500 companies, if lumped together as a single nation, would rank as one of the 50 largest countries in the world in terms of overall population. 1.1. The case study reveals that even the biggest companies buy some parts of their project scope from outside companies. Discuss reasons why companies may choose to "buy" instead of "making" their own work.
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