Aligning corporate strategy, procurement strategy and e‐procurement tools

Abstract

This paper presents a framework for assessing alignment between corporate strategy, procurement strategy and purchasing tools. The framework is built on generation of rents as its common denominator for assessing alignment between the levels. Three types of rents are identified: monopoly rents; Ricardian rents and entrepreneurial rents. The framework is then used for assessing the strategic origin of the following e‐procurement applications: e‐sourcing, e‐tendering, e‐informing, e‐reversed auctions, e‐MRO, Web‐based enterprise resource planning and e‐collaboration. The results indicate that the e‐procurement tools are fully viable for creating monopoly rents, moderately viable for creating Ricardian rents and only somewhat viable for creating entrepreneurial rents. Therefore, it is necessary to first understand how the firm generates rents before procurement strategy and e‐procurement tools are implemented in order to avoid misalignment.

Citation

Knudsen, D. (2003), "Aligning corporate strategy, procurement strategy and e‐procurement tools", International Journal of Physical Distribution & Logistics Management, Vol. 33 No. 8, pp. 720-734. https://doi.org/10.1108/09600030310502894