Businesses aim to maximise their profits since the beginning of economic thinking. Hence, maximum efficiency and minimum costs play a key role within this thinking (Mankiw, 2011). In this context, purchasing gained much attention in terms of increasingly tough competition as the costs for purchased goods and services add up to around 50 per cent of the total costs for goods sold (COGS) on average (van Weele, 2010). This high proportion illustrates that purchasing encompasses more than the operational buying process. In fact, it is a function that comprises various activities. Van Weele (2010, p.8) defines purchasing as ‘the management of the company’s external resources in such a way that the supply of all goods, services, capabilities and knowledge which are necessary for running, maintaining and managing the company’s primary and support activities is secured at the most favourable conditions’. Consequently, all activities to manage the company’s external resources are included in purchasing functions. In recent years it seems this management has become more difficult due to circumstances such as economic, financial and political crises. Even acts of God can lead to greater volatility and uncertainty that may impact the process of purchasing. Hence, in order to cope with the likely tough economic climate in 2012, businesses have to reflect possible strategies. Moreover, due to the increased importance of purchasing and supply management, risks as well as challenges related to these functions have to be pointed out in order to evaluate its contribution for managing the economic situation.
Inhaltsverzeichnis (Table of Contents)
- 1 INTRODUCTION
- 2 CHARACTERISTICS AND PROSPECTS OF THE ECONOMIC CLIMATE
- 3 GLOBAL PURCHASING AND ITS ECONOMIC CONTRIBUTION
- 3.1 Display of different approaches applicable
- 3.2 Risk management
- 3.3 Saving of costs
- 4 CONCLUSION
Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)
This paper aims to analyze the potential contribution of global purchasing in a challenging economic climate, specifically focusing on the year 2012. It examines the characteristics of this climate and explores how purchasing strategies can mitigate risks and reduce costs.
- The impact of the economic climate on businesses
- The role of global purchasing in cost reduction
- Risk management strategies within global purchasing
- Different approaches applicable to global purchasing
- The significance of purchasing in overall business efficiency
Zusammenfassung der Kapitel (Chapter Summaries)
1 INTRODUCTION: This introductory chapter establishes the context of the study by highlighting the importance of maximizing profits and minimizing costs in business. It emphasizes the significant role of purchasing, accounting for approximately 50% of the cost of goods sold (COGS), and defines purchasing as the management of external resources to secure necessary goods, services, and knowledge at favorable conditions. The chapter introduces the challenges posed by economic, financial, and political crises, underscoring the need for businesses to develop effective strategies to navigate the anticipated tough economic climate of 2012.
2 CHARACTERISTICS AND PROSPECTS OF THE ECONOMIC CLIMATE: This chapter delves into the indicators used to assess the economic climate, primarily focusing on the Gross Domestic Product (GDP). It presents a comparison of predicted GDP growth rates for advanced economies (e.g., US, Japan, UK, Germany, France) and emerging/developing economies (e.g., BRIC nations), highlighting the disparity in projected growth. The chapter analyzes the reasons behind the slower growth in advanced economies, such as slow economic recovery and high debt levels resulting from the economic crisis. External factors, including the Japanese tsunami and political unrest in the Middle East and North Africa, are also discussed as contributing to the slowdown in global economic activity. The downward adjustments in GDP growth forecasts by the International Monetary Fund (IMF) are presented as evidence of the worsening economic outlook.
Schlüsselwörter (Keywords)
Global purchasing, economic climate, cost reduction, risk management, GDP growth, emerging economies, advanced economies, supply chain management, business efficiency, International Monetary Fund (IMF).
Frequently Asked Questions: A Comprehensive Language Preview
What is the purpose of this document?
This document provides a comprehensive preview of a paper analyzing the potential contribution of global purchasing in a challenging economic climate, specifically focusing on the year 2012. It includes a table of contents, objectives and key themes, chapter summaries, and keywords.
What are the main topics covered in the paper?
The paper examines the characteristics of the 2012 economic climate, exploring how global purchasing strategies can mitigate risks and reduce costs. Key themes include the impact of the economic climate on businesses, the role of global purchasing in cost reduction, risk management strategies, different approaches to global purchasing, and the significance of purchasing in overall business efficiency.
What is the focus of Chapter 1 (Introduction)?
Chapter 1 sets the stage by emphasizing the importance of maximizing profits and minimizing costs in business. It highlights the significant role of purchasing (approximately 50% of the cost of goods sold) and introduces the challenges posed by economic, financial, and political crises in 2012.
What is discussed in Chapter 2 (Characteristics and Prospects of the Economic Climate)?
Chapter 2 analyzes the economic climate using indicators like Gross Domestic Product (GDP). It compares predicted GDP growth rates for advanced and emerging economies, explaining the slower growth in advanced economies due to factors like slow economic recovery, high debt levels, and external events (e.g., the Japanese tsunami, political unrest).
What are the key takeaways from the chapter summaries?
The chapter summaries provide concise overviews of the paper's core arguments, highlighting the importance of effective purchasing strategies in navigating a challenging economic climate. They emphasize the need to understand economic indicators, manage risks, and explore different approaches to global purchasing for cost reduction and improved business efficiency.
What are the key words associated with this paper?
The key words include: Global purchasing, economic climate, cost reduction, risk management, GDP growth, emerging economies, advanced economies, supply chain management, business efficiency, and International Monetary Fund (IMF).
What is the overall objective of the research?
The overall objective is to analyze how global purchasing can contribute to business success in a difficult economic environment by focusing on cost reduction and risk mitigation.
What specific aspects of global purchasing are examined?
The paper examines various aspects of global purchasing, including different applicable approaches, risk management strategies, and cost-saving techniques within the context of the 2012 economic climate.
How does the paper address the challenges of the 2012 economic climate?
The paper addresses the challenges by analyzing the characteristics of the economic climate and proposing the use of strategic global purchasing to mitigate risks and reduce costs associated with the difficult economic conditions.
What is the significance of the year 2012 in this research?
The year 2012 serves as a specific case study to analyze the impact of a challenging economic climate on businesses and the role of global purchasing strategies in navigating these challenges.
- Citar trabajo
- Christian Krogmann (Autor), 2011, Tough Economic Climate, Múnich, GRIN Verlag, https://www.grin.com/document/195083
