Reverse Function of Strategic Procurement
Prolonging the Life of ill-Conceived Business Strategy.
DOI:
https://doi.org/10.51094/jxiv.774Keywords:
Procurement, Strategic activity, Strategic procurement, Business strategy, Negative impactAbstract
Abstract: Procurement activities are generally assumed to be simple, routine tasks, such as managing deliveries and costs, and this has been in prior academic research as well. However, procurement also engages in strategic activities that affect the requirements and elements of business strategy considerations. Strategic procurement activities are innovation-driven in a way that triggers innovation by new materials and the products by using those new materials. This is the positive aspects of strategic procurement activities. However, the author encountered cases in which strategic procurement had a negative impact. The case is that of Japanese manufacturers in the solar panel industry. In the three Japanese manufacturers, the strategic activities of procurement contributed to the prolongation of their business without a fundamental review of their business strategy, with the effect of a certain level of cost reduction, while weakening the product differentiation that was originally at the core of each company's business strategy. In other words, strategic activities in procurement had a negative impact in the form of prolonging the life of ill-conceived business strategy. Thus, When the reverse functionality is occurring, it becomes necessary to suspend strategic procurement activities implemented in a partially-optimal manner, and to fundamentally review the business strategy itself.
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Submitted: 2024-06-25 10:54:20 UTC
Published: 2024-07-09 10:43:08 UTC
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Yoshinobu Nemoto
Taichi Kishimoto
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