Pricing in the purchasing department; finding the right methodology to generate sustainable competitive advantage
Tutor / Supervisor
Student
Sànchez Ollé, Martí
Document type
Master thesis (pre-Bologna period)
Date
2012
rights
Open Access
Publisher
Universitat Politècnica de Catalunya
UPCommons
Abstract
During the economic development of the last decades, many companies have dedicated most
of their efforts and resources in the generation of innovative products that allowed them to
differentiate from the competition and gain market reach.
The implications in the cost structure of the development, production and distribution of these
products have not traditionally been given the same level of analysis. However, it is a market
reality that prices and costs play a very important role when it comes to achieving sustainable
competitive advantage.
In this thesis, a general overview is initially given on the role played by the Supply Chain in
large international enterprises, a more detailed look is given to the supplier-buyer relationships
and the transfer pricing for the goods or services that are outsourced. As a next step,
several methodologies are presented and discussed to assess the performance of the purchasing
prices that are being paid. Finally, Linear Performance Pricing (LPP) is chosen as the suitable
methodology to apply in two real life business cases in a large international enterprise of
the construction industry. The applicability of the method is discussed for different groups of
commodities, the methodology is described and the achieved results are outlined.
Finally, the potential results of the application of this method are outlined and their implications
for the different departments of the company are described.
