PROCUREMENT AND PERFORMANCE MANAGEMENT

Procurement and Performance Management



Procurement and Performance Management

Define the term added value as used in the case, and appraise key measurable improvements to the merged purchasing function that the joint heads of purchasing might introduce.

Added Value is an extra feature or service that is given to a product or service, in order to give greater commercial value. It is usually a rare feature or service, which competitors do not have in an adequate manner, and gives the business or enterprise, some differentiation. It is essential to know that there can be a number of businesses (Walker & Weber 2007, pp. 589-596). However, a business can gain competitive advantage by providing added value to its products or services. The term added value used in the current case refers to the competitive advantage in the hospitality industry, which the directors of the two hotels seek to gain. The merged business can gain significant competitive advantage related to product differentiation with added value, which will guarantee quality assurance, credibility and confidence of the customers (Walker & Ruekert 1998, pp. 15-33).

Moreover, the functions of the merged business will improve with the increased level of expertise and ideas. As a result, management and quality assurance are keys to strategic objectives of the hospitality business in building competitive advantage. The technological design of management systems, quality assurance and traceability assurance as a result of added value, facilitate in the generation of new business in the international market, improvement in business and creating new strategic alliances (Reed & Defillippi 2000, pp. 88-102). These strategic alliances are essential in having partners or suppliers in the local market. The common goal of these business leaders is the development of strategies and competitive advantages based on the assurance of quality, origin, traceability and adding value to products and business processes. These organizations develop plans and / or systems focused on food safety and quality management, being a creative strategy for competitive advantage. In short, more and more often, products are differentiated through the addition of value (Poppo & Zenger 1998, pp. 853-887).

The merger can bring improvement in the business by adding value through greater degree of processing, product presentation systems, quality assurance, traceability, and product differentiating attributes. The differentiating attributes may incorporate the use of organic ingredients in the preparation of food, natural flavors, additions of nutrients and vitamins. Other features can aim to improve services such as timely service to the customers, improved entertainment services, and information management system. The economic value of the products increases as they have higher added value and greater degree of differentiation. In this sense, the merger can add value through quality, identification and information, which is advantageous in doing business (Phillips 1996, pp. 347-362).

The merged business can improve the purchasing function by introducing innovative supply chain procedures and techniques. In this way, the business can benefit by having an effective system for monitoring the current inventory and forecasting the demand for its future ...