Determining the purchase situation: Cornerstone of supplier relationship management

Abstract

Due to the enormous benefits that can be gained from cooperation with suppliers increased strategic attention has been paid to this issue. Accordingly, procurement has moved to the agenda of senior management. Modern procurement approaches are reflecting this changing emphasis towards the importance of quality and innovativeness of suppliers as opposed to pure price negotiations (Hakansson & Eriksson 1993). However, different approaches are suitable for different purchase situations depending on the specific circumstances the buying firm embraces. Detailed evaluation and analysis of the purchase situation are even more crucial to a company’s sustainable success, since new ways of interacting, such as electronic marketplaces, are developing fast and changing the way firms cooperate.