International Purchasing and Supply

Part 1

Contribution of purchasing overseas to strategic objectives

With an increasing spread and adoption of technology in business, companies are increasingly expanding their boundaries to operate on the global scale in order to reach new markets and increase overall revenue. According to Mawson Global (2015), global purchasing and sourcing of products is guaranteed to increase a company’s profits dramatically regardless of the size of the organization or the volume of products bought. These benefits associated with the purchase of fashion products overseas contributes to the realization of all the strategic objectives of ASOS. , making it an impressive and compelling subject for business dissertation help.

Among the key benefits of purchasing products overseas is the ability to access superior quality products which helps ASOS achieve its objective of offering the best in class products and services to its customers. Mawson Global (2015) asserts that domestic suppliers often lack the adequate technology and capacity to develop superior quality products at a local level and thereby enable the realization of all the consumer needs and wants. Sourcing products internationally as such helps ASOS procure high quality and diverse fashion design products that ensure the provision of the best in class products and services.

Another main advantage of global sourcing is cost saving, an aspect which enables ASOS to achieve its first objective of providing its customers with great fashion at great prices. Based on Nibusinessinfo, (2021), a wide range of foreign suppliers and manufacturers especially in the fashion industry offer their products and services at competitive prices. This in addition to the savings made in terms of labor cost that would go in manufacturing means the company can offer the purchased products locally at much lower prices which enhances increasing revenues.

Contribution of IPD to business competitiveness

Through international purchasing spearheaded by the international purchasing department (IPD), ASOS can source a wide variety of fashion products and accessories in the international market that are not available in the local market. This enables the introduction of new products within the local market for which ASOS is the only potential supplier, subsequently affording the company significant competitive advantage. According to Martinuzzi (2018) different markets and countries have access to different world class technology, cutting edge research designs and specialized knowledge which may not be readily available for local manufacturers. As a result, such countries are capable of manufacturing better quality products which are highly diverse and unique to the specific country. Through the purchase and importation of such unique fashion products into the local market where they are not available, ASOS through the IPD are able to afford significant competitive advantage over other brands. IPD as a department also takes up the entire responsibility of sourcing unique products from the international market to ensure ASOS has a sufficient supply of inventory. As a result, the other departments of the company are then free to pursue much more efficient online marketing and sales strategies which guarantees the company significant competitive advantage when it comes to sales and customer retention.

Influence of Technology on decision making

The adoption and implementation of technology into the business supply chain has effectively localized the global market regardless of where the business is headquartered. Technologies play a significant role in international companies such as ASOS. The availability of technological platforms where companies can significantly interact with customers and prospective clients regardless of their location has been impactful to ASOS’s international purchasing strategy. For instance, modern technology has made communication significantly instantaneous and easy all over the world allowing ASOS to be able to contact and communicate effectively with all of its 173 suppliers across the 24 countries. Singla (2021) advances that the development of effective communication channels like instant messaging as a result of modern technology contribute significantly to business productivity especially in the global scale. ASOS executives are able to make decisions faster and instantaneously due to the effective communication channels which further enhance the progression and development of the business ultimately leading to profitability.

Technology has also been adopted in the supply chain for inventory management and logistics. The company can use electronic inventory management software to be able to track the quantity and quality of products on transit from their source to the destination. With logistical and inventory information available for the company’s management instantaneously, adequate decision making can be made regarding the products including whether the batch in transit is enough and when and whether to order more products. Technological inventory management can also enable the company to evaluate the products turnover and decide which products are adequate for the market to increase their supply as well as the products whose reception are not up to par and can as such be minimized in the preceding purchases.

National and International Quality standards

Both national and international quality standards are rules set by organizations and associations to determine the product quality being purchased as well as the compliance of the suppliers to all the set national and international trade laws (Das, 2017). These standards ensure products are of superior quality as advertised and can be inspected by the company before hand to ensure that the products purchased meet the required standards. Companies looking to source products and services overseas such as ASOS can evaluate the international quality standards to allow them ascertain the adherence of their supplier and whether the products meet the required international standards. In this way the products sourced from an overseas market can then be effectively confirmed to be legitimate and adequate for sale in the local market.

Such quality standards are often also evaluated by prospective customers to ensure that the products they buy are legitimate and worth the money that they spend. For instance, customers are significantly aware of the quality standards in designer clothing such as Gucci and Fendi products and will often inspect the products in the local market to ascertain the adherence to these standards before carrying out any purchases. As such it is in the best interest of companies that engage in international sourcing to ascertain the adherence of such standards to ensure successful overseas sourcing.

References

• Das, R., 2017. Define International Quality Standards. [online] Bizfluent. Available at: [Accessed 14 October 2021].
• Martinuzzi, B., 2018. What Are the Advantages of International Trade?. [online] Business Class: Trends and Insights | American Express. Available at: [Accessed 14 October 2021].
• Mawson Global, 2015. 5 Benefits Global Sourcing Organisations Can’t Afford to Ignore | Mawson Global | Global Sourcing, Mawson Global. [online] Mawson Global. Available at: [Accessed 14 October 2021].
• Nibusinessinfo, 2021. Advantages of sourcing overseas | nibusinessinfo.co.uk. [online] Nibusinessinfo.co.uk. Available at: [Accessed 14 October 2021].
• Singla, S., 2021. How has Technology Changed the Workplace Communication? - Insights Success. [online] Insights Success. Available at: [Accessed 14 October 2021].

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