Institut für Unternehmensführung

A Strategic Approach to the Vertical Range of Manufacture – A Case Study on the Electric Vehicle in an Automotive Company

  • Typ:Masterarbeit
  • Betreuer:

    Marc Wouters

  • Zusatzfeld:


  • Products brought forth by disruptive innovation improve quickly and continuously,
    challenging both existing products (Bower and Christensen, 1995: 44–45) and their
    manufacturers. Hence, new products may enter a company’s portfolio, while others
    may be discontinued. Accordingly, these companies need to decide which products
    and associated components to manufacture in-house and which to source externally.
    This paper reports on the development of a strategic approach to decisions whether
    to make or buy selected objects (i.e., products, components and parts), including
    objects affected by disruption. The proposed approach relies on a two-dimensional
    portfolio to facilitate decision-making. Objects are placed in the portfolio according to
    an underlying scoring-system, which uses company-specific weights derived from the
    analytic hierarchy process (AHP) and inputs gained through semi-structured expert
    interviews. A case study is conducted at a traditional manufacturer of automobiles to
    apply the approach to powertrain components of electric vehicles. The results
    indicate that the approach is generally suitable for strategic decisions on the vertical
    range of manufacture, but has to be refined in order to be used practically. Its
    complexity has been criticized by the case company’s employees, but the approach
    was appreciated due to its ability to stimulate constructive discussions. The main
    contribution of this study to the literature is to present the conceptualization of a
    strategic approach to the vertical range of manufacture and the critical discussion of
    experiences which were made during its application. Financial make-or-buy analyses
    were not part of the study.