Internal production of subassemblies and parts is actually a backward vertical integration policy. Vertical integration gives a firm more control over the part in question. However, the greater the percentage of internal parts an assembly firm produces, the greater its need to have competence in each of the areas involved. It is difficult for a manufacturer such as an automobile company to have competence in areas of production of all parts that go into producing and assembling a car. Therefore, outsourcing to suppliers reduces the pressure on firms to try to do everything