Chapter 7 Market structures and supply research Program Market and market structures Supply market research Structuring supply market research Supply market research and information technology Markets and market structures External structure Industrial branch, horizontal relationship Industrial column or supply chain Materials flow: Diverging materials flow Linear materials flow Converging materials flow External factors determine the market structure Number of suppliers Number of buyers Degree of differentiation Market structures Structures at the supply side: Pure competition Monopolistic competition Oligopoly Monopoly Structures at the demand side: Pure competition Oligopsony Monopsony Typology of market structures One Few Many One Bilateral monopoly, Limited supply-side ‘captive market’ monopoly (fuel (spare parts) pumps) Supply-side monopoly (gas, water, electricity) Few Limited demandside monopoly (telephone exchanges, trains) Bilateral oligopoly (chemical semimanufacturers) Supply-side oligopoly (copiers, computers) Many Demand-side monopoly (weapons systems, ammunition) Demand-side oligopoly suppliers (components automobile industry) Polypolistic competition (office supplies) Definition Supply market research: Systematic gathering, classification and analysis of data considering all relevant factors that influence the procurement of goods and services for the purpose of meeting present and future company requirements. On a regular or project base Qualitative or quantitative Focused on long term or short term supply Three areas of supply market research Macro-economic research Meso-economic research Micro-economic research Europe BASF Ford Steel Chrysle Shell BayerGMr Automotive e.g. Chemical industry industry Chemical industry US US Japan adapted from Faes and de Weerd, 1983 Why supply market research? The following factors have stimulated the development of supply market research: Continuous technological development Supply market dynamics Monetary developments Offset obligations Changes in tax regimes Structure of supply market research Determine objectives Prepare research report Cost-benefit analysis A stepwise approach Data analysis Feasibility study Data collection What? Desk research Execution of research activities Design of research activities Where? Field research Purchasing market research and IT Companies are discovering the many ways in which ICT may support their purchasing operations and strategies. Some examples: Company's like Saint Gobain, which is active in a wide range of products ranging from glass manufacturing to construction materials, have installed a worldwide purchasing Intranet. Other manufacturing companies have built similar systems based on Microsoft Outlook software. Data suppliers like Yellow Pages, ABC have now available through their websites vast supplier bases covering supplier addresses in all major EC countries enabling buyers to conduct market surveys in short time. Sony uses its Purchasing website to attract new suppliers for certain commodities. Companies like FedEx, DHL, UPS provide linkages through the Internet which enable companies to keep track of their deliveries. Conclusions The ever-increasing turbulence in global supply markets makes supply market research a crucial activity. Supply market research is required in order to keep informed about going on changes Supply market structures determine the buyer's tactics In setting up research a stepwise approach is recommended.