What does a Virtual Company primarily rely on?

A Virtual Company primarily relies on a variety of supplier relationships to provide services on demand. This model allows the business to remain flexible and responsive to market changes without the burden of maintaining extensive in-house resources. By leveraging diverse supplier relationships, a Virtual Company can access a wide range of competencies and resources, enabling it to quickly scale operations according to demand. This flexibility is a fundamental characteristic of Virtual Companies, as they often operate in dynamic environments where customer needs can shift rapidly.

In contrast, the focus on a single long-term supplier may limit options and increase risks associated with dependency, while in-house production to meet all demands can lead to inefficiencies and higher costs, reducing overall agility. Fixed organizational boundaries could hinder the ability to adapt and collaborate with different partners, which is contrary to the essence of a Virtual Company that thrives on fluidity and diversified partnerships. Hence, the correct answer emphasizes the strategic use of relationships to achieve operational effectiveness and adaptability in the marketplace.