Chapter 7 Market structures and supply research

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Chapter 7Market structures and supply research
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Program

• Market and market structures
• Supply market research
• Structuring supply market research
• Supply market research and information technology

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Markets and market structures

• External structure
• Industrial branch, horizontal relationship
• Industrial column or supply chain
• Materials flow
• Diverging materials flow
• Linear materials flow
• Converging materials flow
• External factors determine the market structure
• Number of suppliers
• Number of buyers
• Degree of differentiation

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Market structures

• Structures at the supply side
• Pure competition
• Monopolistic competition
• Oligopoly
• Monopoly
• Structures at the demand side
• Pure competition
• Oligopsony
• Monopsony

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Typology of market structures
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Definition

• Supply market research
• Systematic gathering, classification and analysis
  of data considering all relevant factors that
  influence the procurement of goods and services
  for the purpose of meeting present and future
  company requirements.
• On a regular or project base
• Qualitative or quantitative
• Focused on long term or short term supply

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Three areasof supply market research
Macro-economic research
Meso-economic research
Micro-economic research
BASF
Ford
Europe
Steel
Chrysler
Shell
Bayer
GM
Automotive industry
e.g. Chemical industry
Chemical industry
US
US
Japan
adapted from Faes and de Weerd, 1983
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Why supply market research?

• The following factors have stimulated the
  development of supply market research
• Continuous technological development
• Supply market dynamics
• Monetary developments
• Offset obligations
• Changes in tax regimes

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Structure of supply market research
Determine objectives
Prepare research report
A stepwise approach
Cost-benefit analysis
Data analysis
Feasibility study
Data collection
What?
Desk research
Execution of research activities
Design of research activities
Where?
Field research
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Purchasing market research and IT

• Companies are discovering the many ways in which
  ICT may support
• their purchasing operations and strategies. Some
  examples
• Company's like Saint Gobain, which is active in a
  wide range of products ranging from glass
  manufacturing to construction materials, have
  installed a worldwide purchasing Intranet. Other
  manufacturing companies have built similar
  systems based on Microsoft Outlook software.
• Data suppliers like Yellow Pages, ABC have now
  available through their websites vast supplier
  bases covering supplier addresses in all major EC
  countries enabling buyers to conduct market
  surveys in short time.
• Sony uses its Purchasing website to attract new
  suppliers for certain commodities.
• Companies like FedEx, DHL, UPS provide linkages
  through the Internet which enable companies to
  keep track of their deliveries.

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Conclusions

• The ever-increasing turbulence in global supply
  markets makes supply market research a crucial
  activity.
• Supply market research is required in order to
  keep informed about going on changes
• Supply market structures determine the buyer's
  tactics
• In setting up research a stepwise approach is
  recommended.