Ch. 6 Sourcing Strategy Flashcards
1
Q
4 Sourcing Strategies
A
- ) Business Competitive Advantages
- ) Spend Analysis
- ) Forecast Future Spend
- ) Market Research
2
Q
Business Competitive Advantage (5)
A
What makes the firm different and unique in the market
- -Cost (ex: Walmart)
- -Speed
- -Technology
- -Ease of Use
- -Categories (ex: Cost Leadership, Differentiation, Focus)
3
Q
Spend Analysis
A
Review of a firm's entire set of purchases Answers questions such as... -What was purchased? -How much was purchased? -What was the rate of purchase? -What was spend? -With whom was it spent?
4
Q
Forecast Future Spend (4)
A
Try to determine future requirements
- Economic conditions
- Market Analysis
- Competitors Actions
- Previous years requirements
5
Q
Market Research (9)
A
Understand supply markets..."what kind of environment am I in?" Information categories: -Key suppliers -Price data and trends -Environmental issues -Available capacity -Cost data and trends -Regulatory issues -Technology trends -Technical requirements -Other available data
6
Q
Market Research: Information Sources (12)
A
- Trade journals
- Snowball sampling
- Suppliers
- Annual reports
- Trade association
- Investment reports
- Internet
- Category managers
- Industry analysts
- Business libraries
- Newspapers
- Other sources
7
Q
Triangulation
A
Explore, compare, and contrast data from multiple sources
8
Q
Porter’s Five Forces Model
A
- )-Threat of New Entrants
- )-Buyer Bargaining Power
- )-Pressure from Substitutes
- )-Supplier Bargaining Power
- )—> All working towards Market Internal Competition
Other possible forces…
- Globalization
- Digitalization
- Deregulation
- Taxes
9
Q
Threat of New Entrants (8)
A
- Access to capital marketers
- Availability of skilled workers
- Access to critical technologies, inputs, or distribution
- Product life cycles
- Brand equity and customer loyalty
- Government deregulation
- Risk of switching
- Economies of scale
10
Q
Pressure from Substitutes (4)
A
- Relative performance of substitute products and services
- Relative price of substitutes
- Switching costs
- Buyer propensity to switch
11
Q
Buyer Bargaining Power (9)
A
- Buyer concentration
- Buyer volume
- Buyer switching costs
- Price sensitivity
- Product differences
- Brand identity
- Impact on quality or performance
- Buyer profits
- Availability of substitutes
12
Q
Supplier Bargaining Power (7)
A
- Price of major inputs
- Ability to pass on prices increases
- Availability of key technologies or other resources
- Threat of forward or backward integration
- Industry capacity utilization
- Supplier concentration
- Importance of volume to supplier
13
Q
SWOT Analysis
A
Internal factors -Strengths -----Broad customer base -----Established product range -----Established distribution range -Weaknesses -----Low product innovation -----Traditional unionized business processes -----Low patent protection External factors -Opportunities -----Emergence of other uses and markets -----Emerging overseas markets -----High barriers to entry -Threats -----Emerging overseas suppliers -----New product development costs are high -----Environmental regulations
14
Q
Portfolio Analysis (4)
A
- Bottleneck
- Critical
- Routine
- Leverage
15
Q
Critical Commodity
A
Strategy:
-Form partnerships with suppliers
Tactics:
-Increase role of selected supplier
Actions plans:
- Heavy negotiation
- Supplier process management
- Prepare contingency plans
- Analysis market/competition
- Use functional specifications
