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Case study: Beiersdorf's procurement strategy

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  1. Procurement strategy
  2. Sourcing
  3. Supplier Relationship Management

When it comes to procurement strategy, there was not a specific procurement strategy which could have directly influenced future profitability and cash flows for Beiersdorf in 2005. In addition, Beiersdorf's strategy mainly focused on price rather than a broader sphere which included quality, innovations, time-to-market, growth or working capital. Besides, Beiersdorf couldn't execute category strategies to address different demands of various materials that were not in place. Even if one of the concerns was to be sure of the quality of all products, since if one product in one brand group were to be discredited, the whole brand would suffer, the goal of the purchasing department was mostly to reduce the volume of expenses of whatever nature under the area of procurement.

[...] Case study: Beiersdorf's procurement strategy I. Procurement strategy When it comes to procurement strategy, there was not a specific procurement strategy which could have directly influenced future profitability and cash flows for Beiersdorf in 2005. In addition, Beiersdorf's strategy mainly focused on price rather than a broader sphere which included quality, innovations, time-to-market, growth or working capital. Besides, Beiersdorf couldn't execute category strategies to address different demands of various materials that were not in place. Even if one of the concerns was to be sure of the quality of all products, since if one product in one brand group were to be discredited, the whole brand would suffer, the goal of the purchasing department was mostly to reduce the volume of expenses of whatever nature under the area of procurement. [...]


[...] Also, the company should make more extensive studies about their needs, in order to have a more effective division of the strategy. Making a distinction between indirect and direct purchasing could be, for example, a possibility to reduce the costs. Concerning the criteria's and focus that the company use to choose their suppliers, as well as Category Sourcing Management, we can also consider that in 2005, the company was between phase 1 and 2. In order to organise their strategy, they now need to create an effective supplier classification, as well as define different policies concerning the relationships they have with these suppliers. [...]

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