Getting & understanding the facts
Being prepared is essential for success!!!
Being prepared means:
Understanding your needs & requirements
Knowing the supply market conditions
Knowing your purchasing strategy
Knowing your desired supplier relationship
Being aware of prices & costs
Understanding the supplier company
Understanding the people involved
Assessing the balance of power
Carrying out a SWOT analysis
ITC M7:U2:2.1-1
, Understanding the purchasing context
The required quality
The quantity needed
The required delivery schedule
The desired delivery location ?
The required level of service
Your available budget
ITC M7:U2:2.2-1
, The supply market conditions
Overall supply conditions
Technological developments & substitutes
Price trends
Major cost elements
Market structure & degree of competition
Different supply market segments
Government policies & regulations…
Supply Market
ITC M7:U2:2.2-2
, Action Point 2.2-1
Supply market analysis
Link each statement on the left-hand column to the one that best corresponds on the
right-hand side, by drawing a line between them.
1 Product
differentiation A Buyer power increases
2 Economy of
scale requires B When capacity utilisation is very low
high level of
production
C Barrier to entry of new suppliers
3 The buyer is
relatively small
D Increases range of substitute products
4 Supplier price is
below cost E A strategy for competitive advantage
5 There are many
suppliers
F Supplier power is enhanced
6 Proprietary
technologies
ITC M7:U2:2.2-3
Being prepared is essential for success!!!
Being prepared means:
Understanding your needs & requirements
Knowing the supply market conditions
Knowing your purchasing strategy
Knowing your desired supplier relationship
Being aware of prices & costs
Understanding the supplier company
Understanding the people involved
Assessing the balance of power
Carrying out a SWOT analysis
ITC M7:U2:2.1-1
, Understanding the purchasing context
The required quality
The quantity needed
The required delivery schedule
The desired delivery location ?
The required level of service
Your available budget
ITC M7:U2:2.2-1
, The supply market conditions
Overall supply conditions
Technological developments & substitutes
Price trends
Major cost elements
Market structure & degree of competition
Different supply market segments
Government policies & regulations…
Supply Market
ITC M7:U2:2.2-2
, Action Point 2.2-1
Supply market analysis
Link each statement on the left-hand column to the one that best corresponds on the
right-hand side, by drawing a line between them.
1 Product
differentiation A Buyer power increases
2 Economy of
scale requires B When capacity utilisation is very low
high level of
production
C Barrier to entry of new suppliers
3 The buyer is
relatively small
D Increases range of substitute products
4 Supplier price is
below cost E A strategy for competitive advantage
5 There are many
suppliers
F Supplier power is enhanced
6 Proprietary
technologies
ITC M7:U2:2.2-3
