ADVANTAGES AND DISADVANTAGES OF COMPANIES OPERATING IN GROUP PURCHASING ORGANIZATIONS

  • Zimon, G.
Abstract:
Background: Strong competition, financial crisis, bankruptcy of contractors, all these factors affect negatively the financial situation of enterprises. Large international corporations with multiple divisions are less affected by their customers or suppliers. In the case of small and medium-sized enterprises the downfall of one customer is very important for their financial situation. Therefore, one of the possibilities that influences positively on the safety and financial condition of enterprises is the activity of group purchasing organizations. Methods: Advantages and disadvantages of functioning within group purchasing organizations were determined on the basis of the financial statements of the surveyed companies and questionnaires. The selected financial ratios and questionnaire were used for the research. The research was conducted among 20 companies operating in purchasing groups. Results: The study showed the strengths of purchasing groups and the few disadvantages. The most important advantage of GPOs is that they increase sales, reduce costs and reduce the risk of liquidity. The main disadvantage is loss of self-reliance and longer decision-making time. Conclusions: Working together in group purchasing organizations helps keep small and medium-sized businesses in the market. Operating alone means bankruptcy for some of them. The major problem in purchasing groups is the emergence of intra-group competition and the growing lack of co-operation in them.
SGEM Research areas:
Year:
2017
Type of Publication:
In Proceedings
Keywords:
groups purchasing organizations; strategies
Volume:
17
SGEM Book title:
4th International Multidisciplinary Scientific Conference on Social Sciences and Arts SGEM 2017
Book number:
5
SGEM Series:
International Multidisciplinary Scientific Conference on Social Sciences and Arts-SGEM
Pages:
33-40
Publisher address:
51 Alexander Malinov blvd, Sofia, 1712, Bulgaria
SGEM supporters:
Bulgarian Acad Sci; Acad Sci Czech Republ; Latvian Acad Sci; Polish Acad Sci; Russian Acad Sci; Serbian Acad Sci & Arts; Slovak Acad Sci; Natl Acad Sci Ukraine; Natl Acad Sci Armenia; Sci Council Japan; World Acad Sci; European Acad Sci, Arts & Letters; Ac
Period:
24 - 30 August 2017
ISBN:
978-619-7408-17-1
ISSN:
2367-5659
Conference:
4th International Multidisciplinary Scientific Conference on Social Sciences and Arts SGEM 2017, 24 - 30 August 2017
DOI:
10.5593/sgemsocial2017/15/S05.005
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