Business vertical integration

If you are considering a vertical integration (or an outsourcing) move for your business, you’ll have to assess some important questions:
• What evidence do you have that you possess (or could efficiently develop) the expertise and capacity to take over a production phase currently handled by a supplier?
• Even if you can (profitably) take it over, should you? If the profit margins are lower than those of your core business, or if taking it over creates a distraction that draws resources and focus away from your core business, then a move that looks good on paper could actually hurt the business.
• If you do make the move, what will it allow you to do now that you couldn’t do before, and what would stop your competitors from making a similar move, thus negating any advantage you had gained?