A 12-Point Supply Market Analysis Checklist

Need Help With Your Supply Market Analysis?

PurchTips Edition #329 Click here for the printer-friendly version

Picture of Charles Dominick, SPSM, SPSM2, SPSM3, author of this procurement article on supply market analysis.By Charles Dominick, SPSM, SPSM2, SPSM3

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A common model for analyzing a market is Porter’s Five Forces. Though a good model, it lacks specificity for easy adaptation to procurement.

I have created two tools for more precisely conducting a supply market analysis. The first is the 12-point supply market analysis checklist below. The second I have called “Dominick’s Sourcing See-Saw” and posted on the NLPA Blog.

“Dominick’s Sourcing See-Saw” illustrates how to take the checklist’s results and assess whether you or the supply base will have more leverage in the marketplace so you can adjust your sourcing and negotiation strategy accordingly.

  • Is the availability of capable suppliers high, medium, or low?
  • Is the accessibility of pricing information high, medium, or low?
  • Is the availability of substitute or alternative products/services high, medium, or low?
  • Is your prestige as a customer to suppliers high, medium, or low?
  • Is your organization’s financial health high, medium, or low?
  • Is your organization’s spend on the product/service high, medium, or low?
  • Is the cost for new suppliers to enter the market high, medium, or low?
  • Is the difficulty for a supplier to establish sales channels high, medium, or low?
  • Is the number or complexity of government regulations impacting suppliers high, medium, or low?
  • Is the growth in the market high, medium or low?
  • Is the cost for buying organizations to switch suppliers high, medium, or low?
  • Is the differentiation of a supplier’s product/service high, medium, or low?


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Copyright 2015. This article is the property of the Next Level Purchasing Association and may not be copied or republished in any form without the express written consent of the Next Level Purchasing Association. Click here to request republishing permission.

By Charles Dominick, SPSM, SPSM2, SPSM3

 
 
 
 
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