Title: How to measure competition? The role of price dispersion in B2B supply markets

Authors: Paul Scheffler; Holger Schiele; Philipp Horn

Addresses: Faculty of Behavioural, Management and Social Sciences, University of Twente, P.O. Box 217, NL-7500 AE Enschede, The Netherlands ' Faculty of Behavioural, Management and Social Sciences, University of Twente, P.O. Box 217, NL-7500 AE Enschede, The Netherlands ' Faculty of Behavioural, Management and Social Sciences, University of Twente, P.O. Box 217, NL-7500 AE Enschede, The Netherlands

Abstract: Since the formation of close relationships with suppliers requires a considerable amount of resources, the capacities for such relationships are limited. Thus, recently, research points into the direction that it might not be conducive to unconditionally engage in strategic buyer-supplier alliances. Specifically, in those cases where there is a vivid competition within the supply market, it might not be necessary to cooperate closely. However, a convenient measurement method for competition has been missing in the literature so far. Accordingly, this conceptual paper translates insights from the field of economics for an application in purchasing and supply management. It is recommended to evaluate the product price dispersion of supplier quotations in order to assess the intensity of competition in supply markets. As a consequence, this conceptual paper paves the way for future research on competition between suppliers. For managers, the proposed method could support the development of efficient purchasing strategies.

Keywords: supplier competition; product price dispersion; supplier quotations; B2B markets; industrial purchasing; business-to-business; purchasing management; supply management; purchasing strategies.

DOI: 10.1504/IJPM.2016.078692

International Journal of Procurement Management, 2016 Vol.9 No.5, pp.568 - 586

Received: 23 Apr 2015
Accepted: 12 Jun 2015
Published online: 01 Sep 2016 *

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