strengths that set a firm apart and create competitive advantage. Losing control over them risks losing this edge, as well as valuable knowledge and intellectual property.

If a firm is approached with a lower-cost offer for its core capabilities, it should proceed cautiously. A thorough cost-benefit analysis is crucial. Consider the long-term implications of losing control, potential quality risks, and the supplier’s ability to become a competitor. It might be wiser to invest in internal improvements, explore strategic partnerships, or even consider acquiring the supplier if their capabilities are truly exceptional. Ultimately, the decision should prioritize the firm’s long-term competitive position.