Procurement Strategy supporting Retailer’s Competitive Strategy
Abstract: Summary Business Administration, Business Process & Supply Chain Management, Degree Project (Master), 15 HEC, 4FE06E, Spring 2011 Authors: Haris Khan, Muhammad Jahanzaib Khan, Aziz Ahmad, Naveed Khan. Tutor Petra Andersson. Examiner Helena Forslund. Title Procurement Strategy Supporting Retailer’s Competitive Strategy. Background Due to the intensive competition in retailing, outpacing strategies that offer several competitive advantages are increasingly necessary in order to satisfy consumers. A search of the trade and academic literatures, identified merchandise procurement as one of the key activities retailers use to implement or support retail competitive strategy. The changing industry trends in retailing such as increased competition, increasing size of retailers, shift in power structures, high proportion of cost of goods sold etc have made procurement very critical for a retailer to compete in the market. Research Questions Q: What are the various competitive strategies used by the retail industry in general and the competitive strategies of the case retailers? Q: How do procurement strategies of the case retailers support their specific competitive strategies? Purpose The purpose of this study is to identify competitive strategies used in the retail industry and that of the case companies and investigate if and how the procurement strategy of a retailer supports the implementation of its competitive strategy. Method The empirical data and conclusions drawn from it are based on qualitative case studies carried out in three case retailers ofPakistan. An independent supplier common to all three retailers was also used to collect unbiased information. The information was collected using interviews and questionnaire. The thesis is written from a positivistic perspective with a deductive approach. Conclusion: The conclusions that can be drawn from this study are that primary competitive strategies are price/cost leadership and differentiation, whereas differentiation can be based on several things such as quality, store design, shopping experience etc. The procurement strategies are more relevant and fully support a price leadership strategy than a differentiation strategy. The procurement strategy does support the competitive strategy of a retailer.
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