Build-or-Buy Decision Criteria

Why This Slide Is Useful

This slide is useful because it offers a clear, structured approach to a common strategic dilemma faced by executives and investment professionals. It helps decision-makers systematically assess whether to develop capabilities internally or acquire external solutions, reducing bias and oversight. The categorization into 5 areas ensures comprehensive evaluation, covering operational, technical, and financial dimensions.

For management consultants and strategists, this slide serves as a diagnostic tool to facilitate client discussions on core competencies and outsourcing strategies. It supports the development of tailored recommendations by highlighting critical decision factors that influence long-term value creation.

C-level executives benefit from this framework by gaining clarity on the trade-offs involved in build-or-buy choices. It enables more disciplined decision-making aligned with corporate capabilities, market timing, and cost considerations. The structure also aids in communicating complex strategic options to stakeholders with a concise visual.

In investment contexts, especially for PE firms evaluating potential acquisitions, this slide assists in due diligence by identifying key areas where internal development may be feasible or where external acquisition offers a strategic advantage. It helps prioritize resource allocation and integration planning post-deal.

Overall, this slide supports strategic alignment and risk management by ensuring that build-or-buy decisions are based on a balanced assessment of operational needs, technical readiness, and financial impact.

How This Slide Is Used

This slide is typically used during strategic planning sessions, due diligence processes, or operational reviews. Consultants leverage it to facilitate discussions with clients about core competencies versus outsourcing opportunities, often customizing the criteria to fit specific industries or company contexts.

In practice, teams fill in the placeholders with detailed, company-specific criteria under each category. For example, in a technology firm, the "Technical skills and knowledge" section might include specific skill gaps or vendor capabilities. This customization helps tailor the decision framework to real-world conditions.

PE firms and corporate development teams use this slide during acquisition evaluations to quickly identify areas where internal development is viable versus where external acquisition or partnership makes more sense. It supports rapid decision-making in high-stakes environments by providing a consistent evaluation template.

The slide also functions as a communication tool for aligning stakeholders on decision priorities. It can be integrated into broader strategic roadmaps or investment memos, ensuring that build-or-buy considerations are explicitly addressed and documented. This promotes transparency and accountability in strategic choices.

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