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Supply Market Analysis


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Supply Market Analysis

  1. 1. Kaushik Rana<br />July, 2010<br />Approach to Analyzing a Supply Market and Adding Value to Customers<br />
  2. 2. Content<br /><ul><li> Structure of the supply market
  3. 3. Dynamics of Supply Market
  4. 4. PESTEL Analysis of Supply Market
  5. 5. Analysis using Porter’s 5 Forces
  6. 6. Value Realization through Supply Market Analysis
  7. 7. Q&A</li></li></ul><li>Structure of Supply Market<br /><ul><li> Identify viable sources of supply
  8. 8. Determine market size, quantities, international nature
  9. 9. Number of suppliers per category, location of suppliers
  10. 10. Current and future capabilities of supplier - cost, price, technology, value added and dynamics
  11. 11. The nature of supply network at Tier 2 and Tier 3 level</li></li></ul><li>Dynamics of Supply Market<br /><ul><li> Market cycles, natural and induced.
  12. 12. Life cycles and how they are changing
  13. 13. Capacity change, history and future
  14. 14. Economies of demand in the supply market, how market is changing and develop potential strategies
  15. 15. External cost drivers in the supply market
  16. 16. New segments being created, or old ones dying
  17. 17. Growth and Decline, profitability changes by segment</li></li></ul><li>PESTEL Analysis of Supply Market<br />Political<br />Any geopolitical impacts, history and future, key global geographic centres, what are the currency and duty impacts, are there counter-trade opportunities.<br />Economics<br />How have commodity prices changed in the global market? How are the global economic cycles affecting category prices?<br />Social<br />Any mandate on in-country/local sourcing, creation of local employment opportunities, social responsibility<br />How will technology change and impact costs?<br />Is innovation and technology creating new/better products, new uses etc.<br />Technological<br />Environmental<br />Impact of transportation/energy/raw material cost shocks. Environmental regulations – RoHS, PbFree etc<br />Legal<br />Are there new product and trade regulations – Trade Agreement Act, NAFTA, In-country certification (China, Brazil)<br />
  18. 18. Analysis using Porter’s 5 Forces<br />New Entrant<br />What are the barriers to entry of new suppliers? Can they achieve economies of scale? <br />Supply Market Rivalry<br />Suppliers<br />Buyers<br />Who are the suppliers? What is their size? Breadth of line? Niche focus? Financial strength? Relationship with the company? What are the supplier success factors? <br />Who are the major buyers? By niche and product? For what purpose do they use the product? Relationship with the company?<br />What is the basis of competition – price, quality, speed, value ? <br />• Are suppliers willing to act competitively? What creates that behaviour? <br />Substitutes<br />What substitutes and allied products are there? <br />What is available that the company don’t use and corresponding switching cost?<br />
  19. 19. Value Realization through Supply Market analysis<br /><ul><li>Reduce the total cost of externally purchased materials and services over time.
  20. 20. Identify global sourcing opportunities – low cost supplier, world class operations, achieve scale
  21. 21. Benchmark supplier information for increased competition and enable re-negotiation with suppliers
  22. 22. Help make vs buy assessment
  23. 23. Improve supplier relationship taking into account
  24. 24. supply base is global or local,
  25. 25. category is direct or indirect,
  26. 26. supplier is strategic or tactical
  27. 27. market is competitive or oligopolistic</li></li></ul><li>Q & A<br />
  28. 28. Thank You<br />