ACHIEVING STRATEGIC SUPPLIER LEVERAGE FOR SMALL ENTERPRISES BY USING PURCHASING DEVELOPMENT AND COMPLEXITY

Jeffery Adams

Jonathan Davis

Gary Stading

Ralph G. Kauffman

University of Houston-Downtown

ABSTRACT

Small and medium enterprises (SMEs) do not always have the purchase power of large

companies to leverage lower prices through quantity discounts. Small organizations have to look

for alternatives to offset buying gains enjoyed by larger multi-national enterprises (MNEs). SMEs

need development of purchasing practices to realize these types of strategic benefits. This study

evaluates underlying factors that smaller businesses can use to develop strategic leverage options

with suppliers. Such decisions guide informed strategies to enhance organizational profit

performance. This study supports the idea that SMEs can improve strategic leverage using

purchasing development and complexity, and that relative organizational improvement is

increased by raising the levels of purchasing development and purchasing complexity.