02 Oct International Purchasing Strategy
It is clear that companies are acting more and more internationally these days. The challenges of a developing international market determine a large proportion of your profit. The purchasing strategy of your company plays an important role in this. But what does this actually involve? Many companies forget an efficient purchase strategy, which has means they face many different price in different countries. In terms of IT, this poses many challenges. This includes standardization and purchase prices in different branches and locations. Although companies achieve economies of scale through their global operations, they still have to act locally.
How should you tackle this?
Standardization and a smart purchasing strategy are difficult to implement internationally. After all, different market purchase prices apply in each different country. But how do you ensure that you get a good purchase price for your services or products in every country? In this blog, we set out what you need to consider when setting up a smart international purchasing strategy for your IT. After all, you need to know what you’re getting into. Read on to find out.
Smart ways of dealing with international regulations
Differences in legislation and government regulations are some of the most important factors influencing companies’ pricing strategies in an international market. Governments often impose price monitoring on certain products in order to protect local producers against unfair international competition. But that’s not all. Private copying levies, safety standards, and environmental protection specifications also affect your pricing when you enter a new market.
In addition, import levies also play an important role in setting prices on international markets. Import tariffs are treated as regular taxes, but only foreign competitors have to pay them. So-called anti-dumping provisions are a special case. These prevents products from being brought onto foreign markets at absurdly low prices. This protects both consumers and national products.
But what does this mean for you as an international company? You will have to deal with extra costs per country and you will need to have specific knowledge of all local laws and regulations. It is therefore wise to call in the help of a local party. That way, you can avoid import levies and unpleasant surprises.
Which distribution channels do you use?
International companies often rely on existing suppliers to purchase their products on foreign markets. The quantity of products, the additional costs and the margins of the third parties involved all influence the purchase price abroad. These additional costs will result in a higher purchase price for you. A cooperation with a regular supplier who is present in different countries offers a solution. They help standardize the international purchasing conditions and advise on local laws and regulations. This will help you to reduce unnecessary costs.
No two markets are the same
As a company, you tend to focus on figures, results, and profit sharing; but you do of course do business with people. For example, you may need a very different way of approaching a customer in one country or company compared with another country or company. In some countries, a direct approach and direct contact is appreciated, while in others a gentler approach and a more indirect manner of communicating is valued.
In different countries, and therefore also different cultures, negotiating weighs heavily in determining an international purchasing strategy. You should therefore try to find out which stakeholders are important in order to make the right decision. In doing so, you will need to sketch a clear picture of the cooperation between the two parties. In this way, you can take all interests into account and you are less likely to encounter surprises.
Getting started
Perhaps you find it difficult to set up an efficient purchasing strategy for your IT products and services abroad. Bechtle can help you with this. Think of IT standardization, a clear procurement strategy for your products or support in negotiating basic purchase prices. In addition, they offer you total relief on a local level through all European entities and through the Global IT Alliance which can support you on different continents.