Relative Costs vs. Control

When it comes to developing new products and capabilities, there are 8 possible strategies each with different costs and level of control. Acquisition is one of the 8 strategies, and it may or may not be the strategy of choice.

Take a look at the following:

These 8 strategies are listed in a specific order, with internal development providing the most control at the highest cost, and outsourcing providing the least control at the lowest cost. As you can see, acquisition provides a high level of control at a high cost. If this is not what your firm is looking for, one of the other 8 strategies should be considered.