5. Strategic networks and platforms Flashcards
What is strategic network?
A collection of different organisations that are separate in legal terms but which work collectively to achieve long term strategic advantage.
What is strategic platform?
Means by which the transfer of goods or services between provider and consumer take place.
What is upstream & downstream supply chain?
Uppstream = transactions between business and suppliers.
Downstream = between business and customers.
Types of supply chain?
Push = manufacturers, suppliers, distributors, marketers -> have the most power.
Pull = customers have the most power. Less product-centric, focusing more on customer (marketing-oriented approach). Better serve customer needs, carry fewer inventories, send procudts to market more quickly.
Overall supplier strategy?
Sources
What and where?
Are suppliers` businesses larger or smaller (bargaining power)
Different suppliers in different parts of the world?
Number of suppliers
Single source of supply with bargaining power?
Multiple to avoid problems/delays or supplier getting too powerful?
Cost, quality, speed of delivery
Interrelated -> compromises needed for the right balance
Market or buy/outsource
Antagonism in relationships?
How is the situation today?
Search for lowest price suppliers (tendering, use of power, constant switching).
Heavy penalty clauses, mistrust of all external providers.
Suppliers` knowledge/skills not exploited effectively.
Suppliers didn’t know enough of the end customers to provide ways to improve cost-effectiveness.
Today: more collaboration in which all parties work together to satisfy the end market better. Involve key suppliers/customers in design phase. Long-term sole sourcing agreements for greater level of support & commitment to improvement.
What is e-procurement?
E-sourcing (finding new suppliers & establishing contracts)
E-purchasing (product selection & ordering)
E-payment (electronic invoices & fund transfers)
Benefits of e-procurement?
Reduced labour costs
Reduced inventory levels
Fewer stock outs -> higher production & sales
Wider choice of suppliers
Greater financial transparency & accountability
Better inventory control
Quicker ordering -> easier to apply JIT
Benefits to suppliers also (reduced ordering costs & paperwork, improved cash flow -> strengthens the relationship
Risks of e-procurement?
Tech risks (e.g. system not functioning properly)
Organisational risks (staff reluctsnt to accept the new procurement methods)
No realised costs savings
Main features of industrial customers?
Motivation = satisfy org. needs (e.g stock levels), cost minimization
Individual/group influence
Buyer’s organisational (big or small, centralized or personal)
Reciorocal buying (A buys from B only if B buys from A)
Formal purchasing procedures (written contracts, negotiations, etc.)
Size of purchases
Demand derived from consumer needs (e.g demand for more cars = demand for steel, glass, components. etc.)
Customer segmentation (industrial)?
Geographic
Purchasing characteristics (order size & frequency)
Expected benefit (e.g reliability, VFM, durability, etc.)
Company type (in what business)
Company size
Main features of consumer customers?
Cognitive dissonance (e.g feeling that alternative product would have been better)
Personality & product choice
Influence of other people
Customer segmentation (consumers)?
Psychological characteristics
Purchasing characteristics (heavy/medium/light/non-user)
Demographic
Geographic
Expected benefit
Six market model (helps to do what snd levels)?
Customer markets
Referral markets (bank refers insurance companies)
Supplier markets
Recruitment markets
Influence markets
Internal markets
Relationship marketing compared to traditional marketing?
Concentrates on retention & loyalty
Considerable customer commitment & customer contact
Emphasis on quality
Focus on long-term relationships
Importance on customer benefit
