...management and volume purchases that lead to better prices and terms as well as the ability to work with larger suppliers. This central control enables more efficient inventory control, lower staffing costs and a decrease in overheads. Staff also benefit with better training and support and the ability to build better relationships with suppliers. Many large companies either have experienced quick growth through mergers and acquisitions, and they often have several separate purchasing departments that are each responsible for purchasing a group of products. In a company with a local purchasing structure, departments purchase their own materials and supplies with minimal oversight from corporate. Some companies adopt a hybrid structure, in which some classes of items are purchased centrally and some are purchased locally; or a spending limit is given, with local managers responsible for purchasing goods up to a certain dollar amount. There are advantages to both centralized and a local purchasing program. A centralized program allows for fewer overheads, there is no a longer duplication of staff and the purchasing procedures are standardized. Centralized purchasing may bring better pricing and discounts based on volumes and freight charges and handling may be reduced with better volumes and fewer deliveries. Buyers can build stronger relationships with suppliers and have better product knowledge. Centralized purchasing should give better control for inventory and reduce...
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...capacity of organisation to integrate and deploy resources to achieve an obj. Stakeholders – society, suppliers, creditors, shareholders, employees, customers Levels of strategy * Corporate * Business General environment (Macro) – broad collection of factors that directly or indirectly have the potential to influence every firm in ever industry within the economy PESTDG framework * Identify trends * Explain trends * State if opportunity or threat * Explain why is it an opportunity or threat Segment | Trends | Political / Legal | Changes to workplace relations, carbon tax law | Economical | Rising interest rates, GFC, inflation rate, unemployment rate | Socio-cultural | Climate change, increase in casual workers, greater concern for health | Technological | Wireless communications, cloud computing, growth in hand held devices | Demographical | Aging population, growing disparity in income level | Global | Growth in Chinese and Indian economy, free trade agreements | Industry environment (micro) – the set of factors that influences a firm and its competitive actions and responses PORTER’S 5 Forces Force | Characteristics | Threat of new entrant | Capital requirements, economies of scale, product differentiation, switching cost, brand identity, access to distribution channels, cost disadvantages | Power of supplier | High...
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...structure ▫ Buying behaviour ▫ Marketing practices IIM Ranchi PGDM 2014-16 Market Structure • Demand ▫ Derived vs. direct • Volatility of demand ▫ Greater • Elasticity of demand ▫ Less elastic vs. more elastic – perverse (?) • Market size ▫ Larger • Geographic concentration ▫ Often clustered vs. usually dispersed IIM Ranchi PGDM 2014-16 The Accelerator Effect • Due to derived demand • Rate of change of secondary/tertiary demand > rate of change of primary demand IIM Ranchi PGDM 2014-16 Buying Behaviour • Buying influences ▫ Many vs. few • Purchase cycles ▫ Often long vs. usually short • Transaction value ▫ Higher • Process complexity ▫ More complex IIM Ranchi PGDM 2014-16 Buying Behaviour • Buyer-seller interdependence ▫ Often very close • Importance of relationships ▫ Mostly very high • Purchase professionalism ▫ High vs. low • Degree of interactivity ▫ High vs. low • Formal, written rules ▫ Common vs. uncommon Contd. IIM Ranchi PGDM 2014-16 Marketing Practices • Selling process ▫ Systems vs. product • Personal selling usage ▫ Extensive vs. limited • Promotion ▫ Customer-specific vs. mass marketing • Branding ▫ Limited vs. extensive • Market research ▫ Limited vs. extensive IIM Ranchi PGDM 2014-16 Marketing Practices • Use of relationships ▫ Extensive vs. limited • Web...
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...This reading explains and identifies the different relationships between buyers and suppliers. It also describes how companies need to use strategy when choosing suppliers and interacting with each other because it makes for a more responsive and successful supply chain. There is a need to drop the “us vs. them” mentality because companies need to build networks and partnerships in order to be successful nowadays. The reading gave details on how four highly successful companies used strategic sourcing options to meet the demands of their supply chain networks. Firstly, the Chicago based FMC Corporation met their demands by choosing a single source to supply them. The corporation consolidated all of its industrial metal purchases and put it up for bid via reverse auction. This was a great option for reducing cost because instead of purchasing small batches from several suppliers at higher prices, the corporation could now purchase large batches from a single sources at discounted prices. The downside is that having only one supplier could be detrimental to the supply chain if something happens that prevents the supplier from delivering the FMC Corporation won’t have any other suppliers to fill the void. The FMC Corporation did their due diligence and had enough faith in the supplier to go with them. The second method of strategic sourcing that the reading describes is Apple’s supply chain strategy which is built on speed to market and efficiency. In order to be ready for the...
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...Information Systems MN5121 Competing with IS Yasaman Soltan-Zadeh y.soltan-zadeh@rhul.ac.uk Office: MX 120 Competing with IS • Does IT Matter? • IS and Competitive Advantage • The New Competitive Paradigm Does IT Matter? • Can IT provide a strategic advantage? • Is it sustainable? • Carr, Nicholas (2003), “IT doesn’t matter”, Harvard Business Review, May 2003, pp. 41-49. – “As information technology’s power and ubiquity have grown, its strategic importance has diminished. The way you approach IT investment and management will need to change dramatically” (Carr, 2003) IT Doesn’t Matter! • Information Technology: – Proprietary Technology vs. Infrastructural Technology • The Commoditization of IT – Transport mechanism – more valuable shared rather than isolated – Interconnectivity and interoperability – Standardisation of technology and homogenisation of its functionality – Highly replicable – Rapid price deflation http://www.youtube.com/watch?v=PO2dCaaSDk8 IT Doesn’t Matter! • From Offence to Defence – Spend less – Follow, don’t lead – Focus on vulnerabilities, not opportunities Does IT matter? • Inherently strategic because of indirect effects • Creates possibilities and options that did not exist before • May become ubiquitous! The insight to harness the potential is not distributed evenly. Does IT matter? Three broad lessons • Extracting value from IT requires innovations in business practices. • IT’s economic impacts comes from incremental...
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...is essential to first and foremost understand that B2B marketing cannot exist in isolation, the existence of B2B and B2C markets are in many ways dependent on each other for its survival and growth, a single demand for a B2C product such as a car gives rise to millions of B2B market demands such as aluminum, leather, steering systems, engines, etc (derived demand). Furthermore a failure in one market will have significant detrimental impact on the other. This essay however aims to identify the differences that exist between the two markets and how multinationals such as Hewlett-Packard (HP) implement separate marketing strategies based on the distinctions that exist within the market and their consumers. PRODUCT DIFFERENCE (standardized vs. complex) Hewlett Packard (HP), famous for its laptops, desktops and printers and storage devices sells its products in both markets. The B2C market it operates is more standardized and less complex that its B2B counterpart. Large groups of individual customers exist whose specifications for the products are more or less similar. So HP’s products to cater to them are usually mass produced to meet the needs of the clients with little or no modifications. B2B markets have mammoth sales figures in comparison to the B2C. Unsurprisingly a lot of HP’s revenue come from sales to government’s and other institutions and companies who buy in bulk. HP manufactures specifically designed products to cater to the detailed...
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...creates superior value for customers and competitors are unable to duplicate or find too costly to immitate resources:imput into a firms production process such as capital equipment, the skills of individuals, employees,patents, finance, and talented managers (pg 17) capabilities:the capacity for a set of resources to perform a task or an activity in an integrative manner core competencies: are resources and capabilities that serve as a source of competitive advantage for a firm over its rivals sustainable competitive Advantage strategic flexibility: set of capabilities used to respond to various demands and opportunities existing in a dynamic& uncertain competitive environment -Causes of firm performance (profitability): industry vs. firm • Profit Pool – entails the total profits earned in an industry at all points along the value chain. – helps a firm see what others do not see and to understand primary sources of profits in an industry. • Identifying profit pools: – Define the pool’s boundaries – Estimate the pool’s overall size – Estimate the size of the pool’s value-chain activity – Reconcile the calculations -New competitive landscape: describe, primary drivers (pg. 7-12)...
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...lOMoARcPSD Summary: Book " Purchasing and Supply Chain Management ", Arjan J. van Weele Purchasing Management (Maastricht University) Distributing prohibited | Downloaded by Paulina Gali?ska (p.s.galinska@gmail.com) lOMoARcPSD No one cares if you are fair or not. Use this summary, share it with you friends and good luck studying for your exam. Summary Purchasing and Supply Chain Management – Van Weele 6th Edition Jonas Heller Distributing prohibited | Downloaded by Paulina Gali?ska (p.s.galinska@gmail.com) lOMoARcPSD Summary: Purchasing and Supply Chain Management 10/19/14 TABLE OF CONTENT Chapter 1: The Role of Purchasing in the Value Chain ............................................................................................................... 5 The role of Purchasing and in the Value Chain (P.5) .............................................................................................................. 5 Main differences between buying for primary activities and buying for support activities (P. 7): ........................................ 6 Definition of the concepts (p.7) ............................................................................................................................................. 6 Importance of Purchasing to Business (P.12): ....................................................................................................................... 7 Classification of purchasing goods (p. 15):...
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... outsourcing, e-business. Strategic issues – deal with long term goals (number, location, capacity of facilities) Tactical issues – quarterly/yearly basis (transportation, purchasing, inventory policies) Operational – day-to-day (truck-loading, scheduling, lead-time quotations) Supply chain disruptions: * Part shortages * Roll-out problems * Order change by customers * Production problems * Development problems * Quality problems Dealing with excess inventory: * Write-offs * Customers taking actions * Production curtailment * Markdowns and promotions Chapter 2 Types of inventory: raw materials, WIP, finished goods. We need inventory due to unexpected demand, uncertainty of supply, supplier costs, lead times, and...
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...Marble Cluster Strategy February 2006 CCCA OTF Confidential Information — Copyright © 2004 by OTF Group, Inc Afg Marble DGE 01-06 1 Agenda Introduction to the OTF Group & the Afghanistan Competitiveness Project Step 1: Situation Analysis Step 2: Setting Goals Step 3: Understanding Marble Buyers’ & Importers’ Needs Step 4: Articulate Afghan Marble Positioning Step 5: Develop Action Guidelines Afg Marble DGE 04-09-05 2 OTF Confidential Information — Copyright © 2004 by OTF Group, Inc 1 Who is The OTF Group? The OTF Group (OTF = On The Frontier) is a private sector consulting firm that provides cutting-edge solutions to help firms and industries in emerging markets confront the challenge of developing successful business strategies. Confidential Uganda Trade Statistics Analysis Fixed Investment as a Percentage of GDP Uganda’s Fixed Investment as a Percentage of GDP vs. Selected Nations, 1981-1995 Japan Korea, Rep. Tanzania United States Kenya Sudan Uganda Zair e 50% Tension Moral Purpose OTF Client List (Partial) World Bank Group 40% Percent of Nation’s GDP 30% 20% Leadership 10% 0% 1 981 1983 1985 1987 1989 1991 1993 1995 '89 '91 '93 Receptivity Note: Statistics for years not represented on the chart were not reported Source: World Bank, World Development Indicators, 1997 XCG-ACM-Uga nda- 4-2 0-98 -JR 4 Copyr ight © 1 998 M onito r Comp any, In c. — Confid ential — CAM ...
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...The Global Conference for Wikimedia 6 - 10 August 2014 · London Find out more [ Help with translations! ] Industrial market segmentation From Wikipedia, the free encyclopedia Jump to: navigation, search Industrial market segmentation is a scheme for categorizing industrial and business customers to guide strategic and tactical decision-making, especially in sales and marketing. While government agencies and industry associations use standardized segmentation schemes for statistical surveys, most businesses create their own segmentation scheme to meet their particular needs. While similar to consumer market segmentation, segmenting industrial markets is different and more challenging because of greater complexity in buying processes, buying criteria, and the complexity of industrial products and services themselves. Further complications include role of financing, contracting, and complementary products/services. The goal for every industrial market segmentation scheme is to identify the most significant differences among current and potential customers that will influence their purchase decisions or buying behavior, while keeping the scheme as simple as possible (Occam's Razor). This will allow the industrial marketer to differentiate their prices, programs, or solutions for maximum competitive advantage. Webster describes segmentation variables as “customer characteristics that relate to some important difference in customer response to marketing effort”. (Webster, 2003)[1]...
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...Discuss the concepts of centralized vs. decentralized purchasing authority, identify their relative advantages and disadvantages, and provide examples of when each may be appropriate. Centralized purchasing authority relies on one person to make decisions and direct the company. Sometimes in small businesses this is used because the owner is typically responsible for the operations of the company. The person held accountable in centralized authority structures is held accountable by the top management for proper performance of the purchasing activities. Often in smaller businesses this is necessary to attain a high operating efficiency and to maximize profits. The power of decision making is in just a few positions and there is typically little input from other positions. In large organizations this can be a good tactic if there is little segmentation among the business. In decentralized structures there are several people making decisions and running operations. In decentralized styles there is a team of people and different levels in the business. With having a larger team making decisions employees are usually empowered to make business decisions. Centralized authority can create extreme efficiency for a business. Usually the owner of the business can develop a mission and vision and set specific objectives for the managers to follow to achieve the desired goals. There is potentially a reduction of potential duplication of effort and the ability to leverage...
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...Five Forces attempts to realistically assess potential levels of profitability, opportunity and risk based on five key factors within an industry. This model may be used as a tool to better develop a strategic advantage over competing firms within an industry in a competitive and healthy environment. It identifies five forces that determine the long-run profitability of a market or market segment. * Suppliers * Buyers * Entry/Exit Barriers * Substitutes * Rivalry Supplier power * Supplier concentration * Importance of volume to supplier * Differentiation of inputs * Impact of inputs on cost or differentiation * Switching costs of firms in the industry * Presence of substitute inputs * Threat of forward integration * Cost relative to total purchases in industry Buyer power * Bargaining leverage * Buyer volume * Buyer information * Brand identity * Price sensitivity * Threat of backward integration * Product differentiation * Buyer concentration vs. industry * Substitutes available * Buyers’ incentives...
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...scope and history. • Explain the procurement process, the supply chain, and collaborative commerce. • Identify the main types of B2B commerce: Net marketplaces and private industrial networks. • Explain the four types of Net marketplaces. • Identify the major trends in the development of Net marketplaces. • Identify the role of private industrial networks in transforming the supply chain. • Explain the role of private industrial networks in supporting collaborative commerce. Key Terms total inter-firm trade, p. 770 B2B commerce, p. 770 Internet-based B2B commerce (B2B e-commerce), p. 771 automated order entry systems, p. 771 seller-side solutions, p. 771 electronic data interchange (EDI), p. 772 buyer-side solutions, p. 772 hub-and-spoke system, p. 772 vertical market, p. 772 horizontal markets, p. 772 B2B electronic storefronts, p. 772 Net marketplace, p. 772 private industrial networks, p. 773 procurement process, p. 775 supply chain, p. 775 direct goods, p. 776 indirect goods, p. 776 MRO goods, p. 776 contract purchasing, p. 776 spot purchasing, p. 776 multi-tier supply chain, p. 777 legacy computer systems, p. 778 materials requirement planning (MRP) system, p. 778 enterprise resource planning (ERP) system, p. 778 supply chain management (SCM), p. 779 tight coupling, p. 779 supply chain management (SCM) systems, p. 782 collaborative commerce, p. 783 e-distributor, p. 790 e-procurement Net marketplaces, p. 791 ...
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...Assignment 1 – Competitive Strategy Group Members: Abhishek Rana, Matthew Ross, Michele De Simon, Mohit Kumar How would the different theories discussed by Conner (1991) explain differences in performance among firms? Conner has discussed the differences in performances amongst firms by analyzing the following list of theories: 1. Neo-Classical Theory: Performance is the same across the industry because the industry is characterized by ‘Perfect Competition’. Perfect competition comprises of the following assumptions – Larger number of buyers and suppliers, Homogeneity of the demand, Mobility of resources and Rationality of complete market information. Therefore in such a market setting firms cannot achieve economic profit. 2. Bain-type IO Theory: Above normal performance could be achieved only through collusion encouragement, which in turn leads to monopoly. In an industry characterized by collusion and monopoly, the largest firm has the power to set prices and expand its own market share further, leading to above normal performance. 3. Schumpeter Theory: The core of this theory states that the performance of a firm is driven by Innovation. Monopoly is a more favorable condition for process of innovation because it decreases inherent investment risks involved. Through innovation a firm can achieve indistinctive competence and edge over competitors leading to higher returns and performance. 4. Chicago Theory: This theory is driven by efficiency in production...
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