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Nah, it’s simpler than that - once you bring a dependency in-house, it’s almost impossible to shop for the best option on the market because your internal produ
by dilyevsky 8y ago
Nah, it’s simpler than that - once you bring a dependency in-house, it’s almost impossible to shop for the best option on the market because your internal product is always “the best” and if you don’t agree, then you are a “jerk”.
- AnthonyMouse 8y agoIt's not just the politics, it legitimately changes your whole cost structure. If you spend ten billion dollars in R&D and then someone else comes out with something that is just better, you have a big problem. You still need a hundred million units. The external supplier charges $200/unit. You paid ten billion dollars so you could manufacture your own at an incremental cost of $100/unit. Are you going to pay another twenty billion dollars (total of thirty) to buy all your units from them, even though your competitors are paying twenty in total? Or are you going to carry on manufacturing your own to contain costs, but then your competitors have a superior product? Either way it's a major competitive disadvantage.