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Achieving Economic viability through local sourcing, focused on firms operating in the German food industry

Dreisewerd, Stella Marina (2021) Achieving Economic viability through local sourcing, focused on firms operating in the German food industry.

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Abstract:After experiencing a massive trend of global procurement strategies, local sourcing practices gain more consideration again. Local sourcing is often brought up in connection with ethical and environmental aspects. Therefore, local sourcing has a connection to green sustainability factors but can also enlarge benefits in the non-social and economic domains. Sustainability is a widely discussed topic in academic research. However, the connection of local sourcing drawn to sustainability is not being considered often in terms of economic aspects. The purpose of this study is to examine the economic advantages, which arise for companies pursuing a local sourcing procurement strategy by the example of the German food industry. Therefore, qualitative data in the form of semi-structured interviews with nine purchasers operating in the German food industry were collected. With this data, a comparison to the academic literature-derived proposition was composed. Participants stated that they do not pursue a local sourcing strategy to achieve a price advantage or increased profitability solely. Instead, their motivation lies within non-economic aspects like meeting the high standards of the internal and external environment. These standards are associated with high customer demand, increasing customer satisfaction, and managerial and marketing reasons. In the food industry, resource availability plays an immense role when sourcing goods. This was identified as an issue hindering companies from pursuing an active Local sourcing strategy for their entire product assortment. Seasonality is another critical factor identified in the food sector, making companies reconsider relying on a global sourcing or an EU-wide sourcing strategy.
Item Type:Essay (Bachelor)
Faculty:BMS: Behavioural, Management and Social Sciences
Subject:43 environmental science, 83 economics, 85 business administration, organizational science, 88 social and public administration
Programme:International Business Administration BSc (50952)
Link to this item:http://purl.utwente.nl/essays/86733
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