Fighting For Your Prices
- Topics:
- Price Optimization,
- Sourcing
- Tags:
- Channel Management,
- Marketing,
- Supplier
- Source:
- McKinsey & Company
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Overview: This article enumerates a new kind of professional purchaser that bent on getting rock-bottom costs. But these companies can save themselves by taking up the purchasers’ weapons. There is a killer on the loose near the start of the value chain. Suppliers of basic materials have seen tough times as their own suppliers consolidated and customers squeezed their margins. Article defines professional sourcers that start by using their volume to squeeze as much value out of a supplier as possible. This approach isn’t new, but they win additional value by shifting costs and risks to suppliers. Sourcers don’t care about the effect this line of attack might have on relationships: the goal is to grab value. Sourcers have only begun to pressure basic-materials suppliers and to threaten their long-standing relationships with customers. To counter these dangers, suppliers and others must consider the sourcer’s mind-set by selling their products in a better-informed, more value-oriented way.
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Format: HTML | Date: Jan 2002 | Pages: 1
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