Resource Guide
Methods that Work for Creating Corporate Clients, page 24
The corporate environment is in a constant state of transition. An unpredictable economy, breakthroughs in technology, and increasing globalization all contribute to a climate of rapid, complex change. It is imperative to remain informed about these developments in order to stay competitive.
While there are vast changes that impact businesses overall, there are also isolated trends that drive specific areas. The following trends reflect major changes related to the area of purchasing.
Increased Demands Shift the Focus to the Supply Chain
As customers demand more responsiveness, increased options, faster turn-around time and speedier deliveries, corporations are using the supply chain to define their competitive edge.
According to the Supply Chain Council, the supply chain “encompasses every effort involved in producing and delivering a final product or service, from the supplier’s supplier to the customer’s customer.”
For you, the potential vendor, this means the corporation is usually assessing your value as part of this chain. If your product or service increases the corporation’s ability to be more flexible and responsive with their customers, you will be offering them a competitive advantage.
The Drive to Cut Costs
A large majority (86%) of the corporations surveyed cite pressure to cut costs as one of the most significant factors impacting purchasing decisions. This is critical information to use as you approach corporate representatives. It points to the need for your presentation to integrate ways in which your company can support a corporation’s effort to reduce overhead.
The Trend Toward Larger – and Fewer – Contracts
A large percentage (81%) of corporations are now using “bundled contracts” to increase efficiency and reduce their own costs. In the wake of more aggregated or bundled contracts, many companies are extending their diversity efforts into working with 1st-tier suppliers to increase the diversity of 2nd-tier suppliers. In this scenario, corporations award contracts to 1st-tier suppliers, who are also known as prime or primary contractors. These prime contractors then request bids from other firms for specific sections of the contract. The corporations who win these bids are called 2nd-tier suppliers, secondary contractors or sub-contractors. More than three-quarters (79%) of corporations talk with and encourage 1st-tier suppliers to focus on supplier diversity efforts and 61% measure the use of WBE/MBE suppliers by 1st-tier suppliers.
A Shift Toward Centralization
Centralization was cited by more than half (56%) of the corporations surveyed as having an important or significant impact on purchasing. The trend is important for women business owners who seek to cultivate relationships with corporate purchasing executives. Buyers may be located in a central office, even if one’s products or services are targeted in a regional or satellite facility.
Technology
There is a continuing trend in purchasing to use technology and online contracting to further increase the efficiency of the supply chain. It will benefit you, as a woman business owner seeking access to corporate markets, to become familiar with this trend through web sites and other sources, and to familiarize yourself with how your targeted corporations are utilizing technology to enhance their procurement process.
Citation
Center for Women’s Business Research. “Methods that Work for Creating Corporate Clients, page 24.” Washington, DC.