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Supply Purchasing

In: Business and Management

Submitted By Byroncc40
Words 2316
Pages 10
Submitted via Moodle ZBUS8303

Assignment #1

cover sheet

Student name: BYRON COCKSEDGE Student number: z8994757

Course name: ZBUS 8303- Strategic Procurement and Outsourcing

Date submitted: 7 Mar 2014

Special Consideration: N/A


affirm that the work in this assignment is solely my own other than where explicitly acknowledged to be otherwise.

I assert that the preparation of this work has been completed in accordance with ethical standards appropriate to students of UNSW@ADFA and is a true representation of my current capabilities in this course.

What factor or factors would give a firm market power as a purchaser?

How might a firm possessing market power use procurement to build and sustain competitive advantage derived from (end) product innovation?

In being able to determine any single or set of contributing factors that may give a firm market power as a purchaser, it is best to first agree a definition for market power and how it applies to purchasing. In its broadest definition market power can be defined as the ability of a firm to be able to influence or control terms and or conditions on which goods are bought and sold. There are also numerous schools of thought as to what precisely constitutes market or buyer power. The traditional sense is to define it in terms as an inverse of a monopoly, whereby the buyer can set prices profitably below competitive levels, in what some label a monopsony where there is either only one or a concentrated number of buyers within a competitive selling market (Mellsop and Counsell 2009). However a more holistic approach to buyer power is rather than forcing lower prices, being able to negotiate more favourable terms. However, market power through pure monopsony and according to a review by Chen...

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