Purchasing structures in a sporting goods retail business: a case study

Abstract

Purchasing is an important aspect on company’s performance. It can directly or indirectly create savings and enhance competitive advantage. Increasingly companies have started to recognise this and focus their attention to purchasing structures. The case company had reorganised their purchasing structure in the European market. The change was driven by strategic changes in the sales This study assesses the implementation change by identifying the new structure, analysing the structure and performance and last gives recommendation for further research.

The literature review introduces the basic concepts of purchasing, different purchasing organisational structures and how to evaluate the performance. This study combines both qualitative and quantitative approach and is exploratory in nature. The research was conducted by interviewing a purchasing coordinator at the department followed by a survey sent to the department. At last the company’s first quarter financial results were compared to the corresponding results the year before to see the concrete effects.

The case company was analysed based on the findings in literature, qualitative and quantitative research and financial data. The study identified that centralisation was not fully completed, few markets had still local purchasing activities. Sourcing and operational purchasing were separated and divided into two different departments. The case company was recommended to include all the Western European markets in to the centralised purchasing. Also, the company should establish a procedure to evaluate the financial impact of the restructuring.