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Capital accumulation Essay Nucleon should focus on contracting manufacturing for phases I and II and then for phase III focus on vertical integration of production to create greater economic value, therefore gaining and sustaining competitive advantage and producing the largest NPV. By contracting manufacturing, Nucleon will be able to focus on core competencies with no capital investments. Also, by vertical integration Nucleon gains sources of competitive advantage. Contracting manufacturing focuses on core competencies. Nucleon will have facilities and personnel in place to implement phases I and II, require no capital investments (reducing up front costs: Table 1), and therefore able to focus on clinical trials. As Hurt’s commented, â€Å"It’s important for us to get our products into the clinic before others do.† Vertically integrating increase NPV by 2002 and gains competitive advantage. Nucleon has high threats of opportunism due to uncertainty and complexity. There are over 200 other firms and Nucleon needs to obtain competitive advantage and then sustain this advantage. By integrating, Nucleon has good possibilities of raising funds, producing other products, and raising a larger income. Vertical integration provides a larger potential income for Nucleon in phase III based on NPV (refer to Table 1), while contracting manufacturing for phases I and II provide Nucleon with ability to focus on core competencies and thus producing the largest NPV by 2002 of approximately $20M. Performed well even in the recession. CEO believed that you need to have an effective strategy and right people to execute the strategy. The company has been able to gain competitive advantage, but can they sustain this advantage? Distinguishes us from other players in the MA field, it’s that we stay in touch with the companies. 2001-Present Danaher focused on allocating decisions on the basis of return on invested capital (ROIC)