Small and medium sized enterprises'preferences for cooperative purchasing

Meenks, J.H.M. (2010) Small and medium sized enterprises'preferences for cooperative purchasing.

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Abstract:This study aims to identify the preferences of SME’s concerning cooperative purchasing and purchasing groups. Cooperative purchasing can lead to savings in the procurement processes of purchasing group members but can also produce benefits in other area’s through, amongst others,information sharing amongst members, better relations with suppliers, value-added pricing and increased market access. Overall, cooperative purchasing can improve the market position of organizations. Most study’s concerning cooperative purchasing focus on large organizations and institutions, while cooperative purchasing amongst SME’s remains an area not yet extensively studied. Research however does indicate that cooperative purchasing can benefit SME’s in the same way it does larger (institutional) organizations. Therefore, this study focuses on cooperative purchasing amongst SME’s. To identify the preferences of SME’s concerning cooperative purchasing and purchasing groups this study uses a conjoint analysis, which models client trade-offs among multi-characteristic products or services. The model supposes that alternative product concepts can be defined as a series of specific levels of a broad set of properties (or attributes). First, relevant attributes of group purchasing are identified through a literaturereview. Second, levels are assigned to the attributes. Through a stratified design, the five most relevant attributes were identified. With these five attributes, a fractional factorial design was generated. Respondents were asked to rank-order the generated combinations of attributelevels called profiles. On this data, a conjoint analysis was performed. Results from the conjoint analysis show that respondents value the extent of group negotiations as most important attribute, and prefer group negotiations to focus on goods of 2 strategic value to their companies. Valued second most important attribute is the amount of flexibility members of a purchasing group have in their procurement. SME’s prefer to cooperate on a non-contract base, keeping their procurement processes flexible. A focus on long-term advantages is seen as more important than a focus on short-term advantages. The paper is concluded by a discussion of the results and their implications for the establishment of a purchasing group.
Item Type:Essay (Master)
Faculty:BMS: Behavioural, Management and Social Sciences
Subject:85 business administration, organizational science
Programme:Business Administration MSc (60644)
Link to this item:http://purl.utwente.nl/essays/59960
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