when a firm considers which components, subsystems, or services it should make and which it should buy, it should analyze the issue at two levels: strategic and operational or tactical. the strategic level obviously is the more important of the two at far as the future of the firm is concerned. this initial analysis thus has a forward-looking, future-oriented aura about it. this chapter focuses initially on the strategic analysis and later on the tactical analysis. but first, let's look at a typical make-or-buy scenario.