A prominent chipmaker whose chips were a staple in every PC and the number one CPU choice for every PC builder faced a steep decline in the previous decade. This chipmaker was well known for A to Z of chip making. Its research, development, and manufacturing were all done in-house. This tactic initially played to its strengths, but as time passed, it faced competition from other chipmakers and fell behind in the quality and specs of its main products. In contrast, other players could solely develop their Chips and contract the manufacturing to a dedicated foundry specializing in chip making. In contrast, this notable chipmaker had to work on all fronts with limited capital.
Their decline and fall from grace have been attributed to their reluctance to outsource manufacturing. This approach proves that the do-it-yourself approach can work up to a particular stage, but when a growth cap is seen, it is verified that it is better to focus on the main strengths and outsource the rest of your operations. This shortcoming also holds well in the FMCG sector. Research and development can be carried out in-house, and the technology can be outsourced to a contract manufacturer specializing in manufacturing your products. The top players in the market have formulated a list of factors in assessing a contractor that matches their requirements, and below are the parameters that are on top of their checklist.
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