Impact Of Purchasing Strategies On Organisational Growth
(A case study of Pz Industrial Plc Aba)
The impact of purchasing strategies on organizational growth is profound and far-reaching, influencing various aspects of business development. Effective procurement approaches can enhance operational efficiency, cost-effectiveness, and supply chain resilience, thereby fostering sustainable growth. By optimizing supplier relationships, negotiating favorable terms, and implementing innovative sourcing techniques, companies can mitigate risks, capitalize on market opportunities, and achieve competitive advantages. Furthermore, strategic procurement fosters innovation through collaboration with suppliers, driving product differentiation and market expansion. Adopting sustainable procurement practices not only aligns with corporate social responsibility objectives but also enhances brand reputation, attracting environmentally conscious consumers and investors. Ultimately, by aligning purchasing strategies with overarching business objectives, organizations can catalyze growth, strengthen market position, and achieve long-term success.
The purchasing environment is rapidly changing and purchasing operation to have assumed a new dimension completion is common and customers needs and desire are becoming highly sophisticated hence the need for good purchasing strategies so as to survive. The researcher will collect both the primary and secondary data, the secondary data shall include textbook, journals, reports, old research and other relevant materials, while the questionnaire will be used for collection of primary data. The information collected shall be analyzed using sample percentage and the hypothesis tested with the use of chi-square. The result of the study showed that the failure in the purchasing industry was a result of company, not meeting the needs of customers. Company in Nigeria are sold to be as competitive as the counterpart abroad, but the environment do not abhor the survival and growth of company. The researcher finally recommended that company should not only be market driven but should also endeavour to research into the need of customers, make their services relevant and create the necessary awareness for their services.
Title Page
Approval Page
Dedication
Acknowledgement
Abstract
Table of Contents
CHAPTER ONE
1.0 Introduction
1.1 Background of the Study
1.2 Statement of the Problem
1.3 Objective of the Study
1.4 Research Questions
1.5 Statement of Hypothesis
1.6 Significance of the Study
1.7 Scope of the Study
1.8 Limitation of the Study
1.9 Definition of Terms
CHAPTER TWO
2.0 Literature Review
2.1 Introduction
2.2 Concept of Purchasing
2.3 Post Reform of Purchasing Strategies in Company Service Delivery in Nigeria
2.4 Company Service
2.5 Purchasing Strategies of Some Company
2.6 Needs of Purchasing Company Services
2.7 Method of Purchasing Company Service (Purchasing Mix)
2.8 Purchasing Segmentation
2.9 Basic Problem in Purchasing Purchasing Services
2.10 Government Regulation in The impact of purchasing of purchasing Services
CHAPTER THREE
3.0 Research Design and Methodology
3.1 Introduction
3.2 Research Design
3.3 Sources/Methods of Data Collection
3.4 Population and Sample Size
3.5 Sample Technique
3.6 Reliability of Measuring Instrument
3.7 Method of Data Analysis
CHAPTER FOUR
4.0 Presentation and Analysis of Data
4.1 Introduction
4.2 Presentation of Data
4.3 Analysis of Data
4.4 Test of Hypothesis
4.4 Interpretation of Results
CHAPTER FIVE
5.0 Summary, Conclusion and Recommendation
5.1 Introduction
5.2 Summary of Findings
5.3 Conclusion
5.4 Recommendation
Reference
Appendix
1.0 INTRODUCTION
1.1 BACKGROUND OF THE STUDY
The Nigeria economy got in power till 1986 a highly regulated economy with local, state and federal government owing a large value proportion of the national economy.
However, with the introduction of Structural Adjustment Programme (SAP) in August 1986. The national economy was deregulated and most of the control were abolished while the price mechanisms system or the market force system was introduced to determine the price of goods and services. Before the introduction of the Structural Adjustment Programme (SAP), the purchasing industry, like other sector of the economy was owned largely and controlled by the government.
The sector was dominated by those referred to as the Big four i.e. Intercontinental Company, Africompany, UBA and First Company. However with deregulation of the economy brought about the Structural Adjustment Programme (SAP), many private participants entered the industry. The competition brought by those company offered some basic services some of the service offered by company are receiving deposit of customers, collecting cheques of customers drawn on themselves. From this traditional function developed other services referred to as services purchasing. It is a related purchasing services and now purchasing activities.
A list of services offered by company include acceptance and safe keeping of deposits and other valuable, granting of loans and overdraft to customers, transfer of funds business services foreign exchange services, money creation, cashing credit facility, project financing service funds transfer outside and within Nigeria, letter of credit and foreign currency domiciliary account etc.
Finally, these services benefit both the provide (Company and the receive customers) as well as the economy without them company cannot be in business and the economy will not grow individuals and corporate activities will also be hampered. It is based on these facts that company services become very vital even before the advent of modern purchasing activities.
Paterson Zochoms (PZ) industries limited was incorporated on 4th December 1948, under the name of P.M Nicholas and company limited to take over the soap making activities of Mr. P.B. Nicholas who had some years prior to that data established a factory for that purpose.
Paterson Zochoms itself was incorporated in England in 1884, become a public company quoted in the London and Northern is that o general merchants in activity is that of interest now includes city in Nigeria, Ghana, sierra Leona and textile whole selling in the united kingdom.
In 1957, Mr P.B. Nicholas sold out his interest in the company to P.Z, two years later the company change it name to Alaghon industries limited, and in 1960 adopted the name associated industries 1976, the company change its name to Paterson Zochoms industries limited.
After incorporation in 1948, new factory buildings were erected and modern soap making equipment installed at Aba.
During the years 1967 to 1970, manufacturing operation at the Aba factory was disrupted, and in consequence the company operated in vented premises in Lagos, a factory which enabled it to its customers. The manufacturing buif and equipped factory premises near Logos. The company’s range of products include bar soap and tablet soap perfumery. Cosmetics, confectionery medicaments and pharmaceuticals, all which are distributed throughout Nigeria with butter stock held at strategic centers. The company (P.Z) is well known through its Duck, premier and joy soaps, Rubb ointment, mint super mint pomade, jet hair cream, Venus de Milo rage of cosmetics, Danfulani pomade, Elephant, Apc etc.
All these categories of product must be sold to enable organization attain its objectives that has already been set. It is when consumers are happy with the organization can make the employee happy. The big question therefore is can public relation serve effective as an instrument for attaining the entire corporate objective.
1.2 STATEMENT OF PROBLEMS
i. To present the level of competition in the purchasing industry calls for strategies that will win the customer over.
ii. To understand what is purchasing, what are services and how company market their products called services. These are some of the areas this research emphasis much on.
iii. Ways company can survive and have a sustainable share of market, it must be able to properly and profitable market its products.
iv. To also understand at the end of this research, why company are struggling to stay afloat in the turbulent business environment.
1.3 OBJECTIVES OF THE STUDY
To examine the purchasing strategies employed by company in retaining existing customers and attracting new ones.
To critically examine the various financial services offered by company to measure the effectiveness of the purchasing activities employed by the company also the objective that are intended to be achieved.
To inquire into the cause of negative perception on the company by the public.
1.4 RESEARCH QUESTION
1. Did the post reform competitive create any impact in the purchasing of purchasing services?
2. Does purchasing have any negative effect on purchasing services?
3. What can purchasing of purchasing services contribute to the development of there industry?
1.5 STATEMENT OF HYPOTHESIS
Purchasing strategies activities lead to higher profit for an organisation.
Competition among company lead to better quality of services.
1.6 SIGNIFICANCE OF THE STUDY
i. The research work is in partial fulfilment for the requirement for the award of Higher National Diploma (HND) in purchasing and finance.
ii. The study will help open up the new possible avenue for further researcher, which will help to widen the knowledge of research.
iii. The study will give the researcher as well as the public an insight on the issues, problems and prospect of Purchasing of purchasing in Nigeria.
1.7 SCOPE OF STUDY
As Anyanwu (2010) point out, a researcher is not expected to cover a discipline in the course of his study in line with this statement, this research work would not cover every thing on this topic, but specially on the relevant aspect of the impact of purchasing of purchasing service and the post reform of purchasing strategies in company services delivery in Nigeria.
This study will examine the various purchasing strategies employed by some selected company. The focus is on Nigeria company and the study does not attempt to do comparative analysis of Nigeria company and company in other countries.
1.8 LIMITATION OF THE STUDY
There is no human successful endeavour without constraints. The limitation for this study include :
Financial and time constraints which restrained free movement round the study areas in order to make adequate interviews, observation and assembling of secondary data.
The uncooperative attitude of some staff and customers of the selected company by withdrawing information needed.
The uncooperative attitude of some staff and customers of the selected company by withdrawing information needed.
If we lack the secondary data required for this work it will make the research work difficult.
1.9 DEFINITION OF TERMS
The researcher employed simple English for easy understanding of the terms phrases few terms can still be defined.
Purchasing Strategies: Those strategies employed by firms and organisation to attract customer to there product and services.
Arm Chair Purchasing: This is a period where companyers seat and wait for customers to come and patronize them, they don’t hunt for customers.
Customer Satisfaction: This happen when the customer is pleased with the various services rendered by the company.
Deregulation: To allow a particular sector or allow the market forces to determine price in the market or a particular industry.
Purchasing: This is getting the right goods and service to the right people at the right place at the right time and with the right communication and promotion.
Company: An institution corporate recognised by a country’s highest monetary authority or government, business is determined by that monetary authority or government.
Impact Of Purchasing Strategies On Organisational Growth:
Purchasing strategies play a crucial role in the growth and success of an organization. Effective purchasing can contribute significantly to a company’s bottom line, competitiveness, and overall performance. Here are some key ways in which purchasing strategies can impact organizational growth:
Cost Savings: One of the primary objectives of purchasing strategies is to obtain goods and services at the best possible prices. Effective negotiation, bulk purchasing, and supplier management can lead to cost savings, which directly impact a company’s profitability. Cost savings can be reinvested into the business for growth initiatives.
Supply Chain Efficiency: Purchasing strategies also focus on streamlining the supply chain. Efficient supply chain management can reduce lead times, minimize inventory holding costs, and enhance overall operational efficiency. This, in turn, allows the organization to respond quickly to customer demands and market changes, supporting growth.
Quality and Innovation: Effective purchasing involves selecting suppliers that provide high-quality products or services. By maintaining stringent quality standards and collaborating with innovative suppliers, an organization can improve its own product or service quality and stay competitive in the market. High-quality products can attract more customers and lead to business expansion.
Risk Management: Purchasing strategies include risk assessment and mitigation. This involves identifying potential risks such as supply disruptions, price fluctuations, or supplier reliability issues and developing strategies to manage these risks. Effective risk management can safeguard the organization’s operations and enable it to continue growing even in challenging circumstances.
Supplier Relationships: Building strong relationships with suppliers is a key element of successful purchasing strategies. Collaborative partnerships can lead to better terms, preferential treatment, and access to resources and expertise that can be beneficial for growth. Long-term supplier relationships can also provide stability and consistency in the supply chain.
Market Expansion: A well-executed purchasing strategy can enable an organization to expand into new markets or geographical regions. By sourcing locally or globally, organizations can tap into new customer bases and revenue streams, leading to business growth.
Competitive Advantage: An organization that effectively manages its purchasing function can gain a competitive advantage in the marketplace. Whether through lower costs, faster delivery times, or superior product quality, this advantage can result in increased market share and revenue growth.
Sustainability and Corporate Social Responsibility (CSR): Modern purchasing strategies also emphasize sustainability and CSR considerations. Ethical and environmentally responsible sourcing can resonate with customers and stakeholders, enhancing the organization’s reputation and potentially attracting a larger customer base.
Scalability: As organizations grow, their purchasing strategies must adapt to handle increased demand and complexity. A well-designed purchasing strategy can be scalable and flexible, accommodating the changing needs of the organization as it expands.
Data-Driven Decision-Making: Data analytics and technology play an increasingly important role in purchasing strategies. Leveraging data insights can lead to better decision-making, more accurate forecasting, and improved supplier performance, all of which contribute to organizational growth.
In summary, purchasing strategies have a profound impact on an organization’s growth by influencing cost control, supply chain efficiency, product quality, risk management, and market expansion. A well-designed and executed purchasing strategy can be a competitive advantage and a driver of sustainable growth for any organization.