Eagle Industries Case Answers

1242 WordsJan 14, 20155 Pages
EAGLE INDUSTRIES CASE 1. Why are office products frequently chosen as a lead commodity in strategic sourcing efforts? Office products were chosen as the lead commodity in strategic sourcing efforts conducted by Smith and his team mainly because of the fact that there was not an appreciable difference in the product specifications when it came to differentiating different suppliers. It would almost be like comparing apples against apples. This would therefore provide a nice segway to try and understand the sourcing practices that were currently being employed. Also, office supplies are low value commodities which are used at every level in an organization, and there is a good chance that companies do not optimize these purchases. Hence,…show more content…
Consolidation of industry. Wholesale clubs – Select line of fast moving products on offer, with margins typically about 10% less than office products warehouses. Electronics stores and Computer retailers – Preferred for some computer parts and accessories Office furniture dealers – Specialized furniture dealers who compete with the office products warehouse and contract suppliers for this market. M&A activity: Consolidation in the catalog supplier industry, with Boise Office Products acquiring OfficeMax and Reliable, Staples acquiring Quill, and Office Depot acquiring Viking. Product segments: Four product categories and their respective market share percentages: a. Computer and accessories: 45% b. Supplies: 28% c. Office machines: 20% d. Furniture: 7% Customer segments a. Home office and Small Business (1-19employees): 45% b. Large Business: (50+ employees): 44% c. Medium businesses (20-59 employees): 11% Key Market Indicators: Economic Indicators – small business growth, growth in office workers, and office technology changes. Production Indicators – Economies of scale, geographies of sales. 5. Use information given in the case to estimate potential savings. I am looking for specific numbers here. To make the potential savings we should foucs on lowering the purchase price and increase the efficiency of usage also decrease the transaction costs. So there are 3 parts of potential savings. Total spending = $3,800,000 No of

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