The reason for a company to strongly favour buying a component even if they could make it themselves is that the:

Explanation:

Then a company decides to buy a component rather than make it themselves, one of the primary factors driving this decision is the vendor's ability to offer the component at a lower cost and higher quality than the company can achieve internally. This approach allows the company to leverage the expertise, economies of scale, and specialized capabilities of the vendor, which might not be feasible to replicate internally without significant investment.

Detailed Analysis:

1. Cost Efficiency:

• Vendors often specialize in manufacturing specific components and have optimized their production processes for efficiency. This specialization allows them to produce the components at a lower cost compared to a company that might need to invest in new machinery, training, and setup to produce the same component. Outsourcing the component production to vendors eliminates the need for capital expenditure, maintenance, and operational costs associated with manufacturing the component in-house.

2. Quality Assurance:

• Vendors frequently have stringent quality control mechanisms and certifications in place. Their expertise in producing a particular component ensures higher quality and consistency, which might exceed what the company can achieve, especially if the component requires specialized skills or processes. By purchasing from a vendor, the company benefits from the vendor's technical expertise and dedicated quality assurance systems.

3. Focus on Core Competencies:

• By outsourcing the production of non-core components, companies can focus their resources, efforts, and expertise on their core competencies. This strategic decision allows the company to invest more in innovation, marketing, and other areas that directly impact their competitive advantage.

4. Time Savings:

• Buying components from vendors often saves time, as the company does not need to go through the lengthy process of setting up production lines, hiring and training personnel, and optimizing processes. This faster turnaround is critical in industries where time-to-market is crucial.

5. Risk Mitigation:

• By relying on vendors with proven expertise, the company reduces the risk associated with producing complex components internally. This includes risks related to quality issues, production delays, and technical challenges.