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Role of competitive intelligence in strategic purchasing decisions and its influence on suppliers' resource allocation

Schiefer, Carolina (2013) Role of competitive intelligence in strategic purchasing decisions and its influence on suppliers' resource allocation.

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Abstract:Competition on the factor market undoubtedly has extensive consequence for a company’s profitability and overall market strength. It is therefore most likely that a focal company will try to obtain competitive advantage within purchasing activities. Hence, having an effective and efficient supplier base and the allocation of external resources have received great attention among scholars. Companies strive for the so-called preferred customer status with their respective suppliers. This status grants favorable treatment in terms of suppliers’ resource allocation over other competitors. In order to achieve this preferential treatment, competitor intelligence, referring to information about the focal company’s position in relation to that of others and its individual relationships to its suppliers, in strategic purchasing decisions is essential and part of the companies’ agenda. This paper aims at analyzing how competitor intelligence in strategic purchasing decisions affects the suppliers’ resource allocation and leads to a competitive advantage. Based on an exploratory multiple-case study with ten Global Players, insights into strategic purchasing decisions and the consideration of competitor intelligence were gathered. Thus, this paper sets the first step towards theory building with respect to the use and effect of competitor intelligence in strategic purchasing. It was found that competitor intelligence is imperative for strategic purchasing decisions and positively affects the decision’s outcome. Surprisingly, most of the companies perceive competitors sharing the same supplier to be a threat and an opportunity at the same time. In more detail, results indicate, that while competitor intelligence may slightly affect the buyer-supplier relationship per se; the assumption that competitor information leads to a better resource allocation and ultimately positively affects a company’s competitive advantage is widely accepted by the participants.
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/64139
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