Cost Benefit Analysis Helps a Leading Retail Supplier Develop Better Negotiation Strategies

Category Overview

The global retail supplies industry includes firms involved in selling finished products to end-users. The global retail supplies industry is proliferating due to the increase in population, higher disposable income, increasing customer spending, and GDP growth. However, according to SpendEdge’s cost benefit analysis experts, higher unemployment and inflation rates and the global economic recession are some of the reasons impacting the steady growth of the retail supplies industry.

Consequently, to gain a stronger foothold in the market space, retail supplies firms across the globe have started adopting cost benefit analysis studies to gain an in-depth understanding of the cost structure of the supply chain and develop superior negotiation strategies with suppliers.

Benefit cost analysis (BCA) is a systematic approach used to evaluate the economic feasibility of a project or policy by comparing the benefits it generates to the costs it incurs. It is a decision-making tool that helps assess the efficiency and effectiveness of different options or investments.

The primary objective of benefit-cost analysis is to determine whether the benefits of a project or policy outweigh its costs. By quantifying and monetizing both the positive and negative impacts, BCA provides a framework for comparing alternatives and making informed decisions.

In a benefit-cost analysis, the benefits typically include the positive outcomes or impacts that result from the project or policy. These can be tangible benefits, such as increased revenue or improved public health, as well as intangible benefits, such as enhanced quality of life or environmental preservation.

The Procurement Pain Point and Insights Offered

A leading retail supplies firm wanted to identify cost elements across the supply chain and assess its impact on the overall cost. Additionally, they wanted to gain insights on the negotiation levers adopted by suppliers to ensure low-cost raw material sourcing activities. Furthermore, the client also wanted recommendations on low-cost mix model to cut down the overall cost and devise better negotiation strategies.

To cater to the client’s specific category requirements, the cost benefit analysis experts at SpendEdge followed a comprehensive two-step research methodology, which involved primary and secondary research methodologies coupled with qualitative and quantitative data collection techniques to address the client’s issue.

With the help of this cost benefit analysis study, the retail supplies client was able to predict the cost movements across all cost elements. The client was able to gauge the impact of each cost driver on the overall cost. The cost-benefit analysis study also offered recommendations on low-cost mix models to cut down on their overall cost across the supply chain and devise superior negotiation strategies with the existing suppliers.

Key questions answered in this cost benefit analysis study include

cost benefit analysisBusiness Outcome

This cost-benefit analysis engagement helped the retail supplies client identify the cost elements and comprehend the cost structure across the supply chain. The client was also recommended with insights to devise better negotiation strategies with their suppliers.

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