Knowing what an asset is worth and what determines that value is a pre-requisite for intelligent decision making -- in choosing investments for a portfolio, in deciding on the appropriate price to pay or receive in a takeover and in making investment, financing and dividend choices when running a business. The premise of valuation is that we can make reasonable estimates of value for most assets, and that the same fundamental principles determine the values of all types of assets, real as well as financial.
Explain the scorecard process of evaluating proposals. Describe the different types of B2B buying situations and how they affect sellers.
A need is recognized. Someone recognizes that the organization has a need that can be solved by purchasing a good or service.
Users often drive this stage. In the case of the electronic textbook, it could be, for example, the professor assigned to teach the online course. However, it could be the dean or chairman of the department in which the course is taught. The need is described and quantified.
Next, the buying center, or group of people brought together to help make the buying decision, work to put some parameters around what needs to be purchased. In other words, they describe what they believe is needed, the features it should have, how much of it is needed, where, and so on.
Will an off-the-shelf product do, or must it be customized? Users and influencers come into play here. Should the book be posted on the Web as this book is?
Should it be downloadable? An Example" shows the specifications developed for a janitorial-services purchase by the state of Kentucky. Potential suppliers are searched for. At this stage, the people involved in the buying process seek out information about the products they are looking for and the vendors that can supply them.
Most buyers look online first to find vendors and products, then attend industry trade shows and conventions and telephone or e-mail the suppliers with whom they have relationships.
The buyers might also consult trade magazines, the blogs of industry experts, and perhaps attend Webinars conducted by vendors or visit their facilities.
Purchasing agents often play a key role when it comes to deciding which vendors are the most qualified. Are they reliable and financially stable? Will they be around in the future? Do they need to be located near the organization or can they be in another region of the country or in a foreign country?
Qualified suppliers are asked to complete responses to requests for proposal RFPs. Each vendor that makes the cut is sent a request for proposal RFP An invitation to submit a bid to supply the good or service.
Good sales and marketing professionals do more than just provide basic information to potential buyers in RFPs.
Oftentimes the vendors formally present their products to the people involved in the buying decision. If the good is a physical product, the vendors generally provide the purchaser with samples, which are then inspected and sometimes tested.
They might also ask satisfied customers to make testimonials or initiate a discussion with the buyer to help the buyer get comfortable with the product and offer advice on how best to go about using it.
The proposals are evaluated and supplier s selected.
During this stage, the RFPs are reviewed and the vendor or vendors selected. RFPs are best evaluated if the members agree on the criteria being evaluated and the importance of each.
Different organizations will weight different parts of a proposal differently, depending on their goals and the products they purchase. The price might be very important to some sellers, such as discount and dollar stores.
Other organizations might be more focused on top-of-the-line goods and the service a seller provides.
Recall that the maker of Snapper mowers and snow blowers was more focused on purchasing quality materials to produce top-of-the-line equipment that could be sold at a premium. Still other factors include the availability of products and the reliability with which vendors can supply them.
For high-priced, complex products, after-sales service is likely to be important. A fast-food restaurant might not care too much about the after-sales service for the paper napkins it buys—just that they are inexpensive and readily available.
However, if the restaurant purchases a new drive-thru system, it wants to be assured that the seller will be on hand to repair the system if it breaks down and perhaps train its personnel to use the system.
A scorecard approach can help a company rate the RFPs. The scorecards completed by all the members of the buying team can then be tabulated to help determine the vendor with the highest rating. Sometimes organizations select a single supplier to provide the good or service.
With a single supplier, instead of negotiating two contracts and submitting two purchase orders to buy a particular offering, the company only has to do one of each.The Challenges Leaders Face Around the World More Similar than Different By: William A. Gentry, Regina H.
Eckert, getting buy-in from other departments, groups, or individuals. Table 1 displays the frequency and rank of the Top 10 challenges in each country. The Role of Marketing As marketing gains increasing prominence as an orientation that everyone in the organization shares and as a process that all functions participate in deploying, a critical issue that arises is the role of the marketing function.
Business purchasers, by contrast, do a lot of research, look carefully at specifications, follow a formal buying or procurement process, can experience high switching costs, .
The internal business process perspective provides a view of what the company must excel at to be competitive. The focus of this perspective then is the translation of customer-based measures into measures reflecting the company's internal operations. Each of the above four perspectives must be considered with respect to four parameters.
A business requirements document (BRD) details the business solution for a project including the documentation of customer needs and expectations.
If an initiative intends to modify existing (or introduce new) hardware/software, a new BRD should be created. To understand how this role is changing, we must understand what purchasing is all about, starting with the primary objectives of a world-class purchasing organization.
h2. OBJECTIVE 1: Support Operational Requirements. Supporting this flow requires purchasing to: Understand business requirements Buy products and services At the right price.