Creative procurement strategies to by-pass oligopolies in times of economic scarcity: a sectorial case study

Abstract

In this paper we analysed the strategies buyers can use to creatively by-pass the negative consequences of the increasing number of oligopolistic markets they are faced with due to the economic crisis. The latter causes suppliers to go bankrupt, to curtail their product range and to lay off personnel. Very often oligopolists create a geographically segmented market with separate price policies. Thus they create a “logistical Chinese wall”, which buyers will have to bridge to become more effective. This can be bridged in several ways, as we have investigated by case analysis in one sector of industry. Results are promising in terms of pricing benefits and stability, while at the same time buyers maintained their good quality of delivery and reliability of supply. Constant monitoring of the results is needed. But above all, buyers have to be very creative to achieve success in these markets. Our analysis is mainly true for standardized products and raw materials, but can be expanded if efforts are undertaken towards more standardised supply.