Today, firms are submitted to a highly volatile and competitive scenario, far more complex than that of ten or twenty years ago. In order to face this, firms have outsourced some of their value chain activities, in an attempt to reduce costs, enhance performance and focus on activities that result in competitive advantages. Both the Transaction Costs Economics (TCE) and Resource-Based View (RBV) theories have been applied in outsourcing studies. TCE focuses on the firm’s internal transactions and transactions with the market, by evaluating risk dimensions, idiosyncratic assets and frequency of exchanges. The core issue for RBV is related to the firm’s resources; the theory evaluates their attributes in terms of competitive advantage and performance as compared with the market. The fundamental objective here is to understand why firms outsource their value chain activities. A thorough review of the TCE and RBV theories has been performed, aimed at deepening the understanding of outsourcing related issues. The present research assesses how six instant coffee firms perceive the outsourcing process rationale. The survey was qualitative and based on multiple case studies, and high executives of these firms were interviewed for clarification and evaluation of each case. Instant coffee industry was selected due to the availability of information and access to their members, and because all firms are engaged in outsourcing. In these cases, we have attempted to observe the particular competitive advantages, motivating factors and variables of outsourcing, and which activities had been outsourced. Case study analysis has shown that the higher the risk involved in a transaction, the more firms will tend to internalize activities. Weak competences increase the probability of outsourcing, while high risk of leak of strategic proprietary knowledge reduces the probability of outsourcing. This thesis asserts that both TCE and RBV theories shall be used in conjunction in order to determine the frontiers of a firm, and underlie the evaluation of whether an activity should be outsourced or performed internally. Additionally, this paper affirms that opportunity costs are relevant in defining the outsourcing of activities, and ought to be considered and compared with transaction costs.