INTERNATIONAL
ENTREPRENEURSHIP III
THE GLOBAL B2B ENVIRONMENT
FOCUS ON PROCUREMENT
= A bigger term than simply “buying”.
B2B VS B2C
Audience: B2B targets organisations; B2C targets individuals.
Customer Journey: The B2B buying journey is longer, more rational and
involves multiple people. Example: before a car seat supplier is
approved, steps include: technical evaluation, safety testing, price
negotiation, quality audit & long-term contract
In B2C, the customer simply walks into a dealer and buys a car.
Emotional connection: lower in B2B, but still present (trust, risk avoidance).
B2C uses storytelling, emotions, lifestyle (brand identity, feeling, design).
B2B is more rational but still emotional in terms of: trust, perceived risk,
relationship quality with supplier & fear of choosing a bad supplier
o In B2B, the biggest emotional driver is risk avoidance.
Demand & derived demand: derived demand (B2B demand depends on
consumer markets). B2B demand depends on consumer markets. Ex.
Chemical suppliers create polyurethanes → which become foam blocks
→ which become car seats → which go into a car → demand for cars
(B2C) → drives demand for everything upstream (B2B).
If fewer consumers buy cars, Toyota needs fewer seats → fewer foam blocks →
fewer chemicals → B2B demand falls.
Today B2B companies also use: influencers, social media, brand storytelling,
digital ads & emotional branding
The lines between B2B and B2C are not as rigid as before.
The upstream side is all B2B interactions that take place earlier in the supply chain.
Upstream activity is procurement: Because every company in the early supply
chain must procure (buy) materials, parts, technology, and services before they can
produce anything.
So on a business level, upstream = purchasing the inputs needed for production. Each
step involves procurement decisions (supplier selection, contracting, pricing, quality
requirements).
PROCUREMENT
Supply Chain Management → Logistics Management → Procurement → Sourcing &
Purchasing
1
,PROCUREMENT = THE FULL END-TO-END BUYING PROCESS. Procurement covers
EVERYTHING from:
1. Specifying what we need: What materials? What technical requirements? What
quality standards? What quantities? What delivery frequency?
This step defines the exact need of the company.
2. Supplier selection: Searching for potential suppliers, Comparing offers, Visiting
suppliers, Checking quality, capacity, certifications & Negotiating initial terms
This is part of sourcing.
3. Contracting: Final negotiation, Setting price agreements, Signing contracts, Defining
responsibilities, penalties, service levels (SLA) & Long-term relationship decisions
This ends the strategic buying phase.
From here, it becomes operational/logistical buying:
4. Ordering: Sending purchase orders (POs), Scheduling deliveries, Checking availability
& Confirming quantities
5. Control: Tracking deliveries, Monitoring performance, Checking if the supplier meets
quality, timing, and quantity requirements & Managing logistics issues
6. Follow-up: Reporting problems, Claiming when goods are wrong or late, Evaluating
supplier performance, Approving invoices & Maintaining relationship
→ This completes the full cycle of procurement.
Procurement refers to the entire end-to-end process of
buying, starting from defining what the company needs
up to the final follow-up after delivery.
Sourcing is the strategic phase: identifying needs, searching and evaluating
suppliers, selecting the best partner and negotiating contracts.
Purchasing is the operational phase that follows: placing orders, monitoring
deliveries, solving issues, and approving invoices.
In the broad definition, procurement covers every step from specification
to follow-up.
THE PROCUREMENT PROCESS
SOME CHANGES OVER THE PAST 2 DECADES
1. Higher status of the purchasing role
In the past, purchasing was often a minor task within logistics or administration. Today, it
is a specialised profession with a much higher status inside organisations. Buyers are
2
,expected to have strong negotiation skills, analytical insight, and knowledge of complex
procurement and IT systems.
As a result, selling has also become more difficult for suppliers. Large companies no
longer accept informal sales approaches; they require professional counterparts who
understand contracts, compliance, and structured negotiation processes.
2. Direct versus indirect procurement
Procurement is now clearly divided into two categories:
Direct procurement: purchasing materials that directly end up in the final
product (for example ingredients in food production).
Indirect procurement: purchasing goods and services that support daily
operations, such as office supplies, maintenance, or software.
This distinction has increased specialisation within purchasing departments and has
made procurement more structured and controlled.
3. Central procurement and buying groups
Many large companies and retailers now purchase through central procurement
organisations. In retail, supermarket chains often buy centrally—sometimes from an
international headquarters—and then distribute goods to regional warehouses.
This centralisation makes access more difficult for suppliers, but it also creates very large
volumes once a supplier is accepted. Buying groups coordinate sourcing, negotiate
conditions, and impose common rules on suppliers, including sustainability and sourcing
guidelines.
4. Fewer suppliers and the rise of SRM
Companies increasingly work with fewer, but larger, suppliers. This reduces complexity
but increases dependence and risk.
Winning a large client can generate massive turnover.
Losing such a client can have severe financial consequences.
To manage this, organisations invest heavily in Supplier Relationship Management
(SRM) systems. These systems focus on long-term partnerships, performance
monitoring, and compliance. For smaller suppliers, entering such relationships is difficult
because the standards are high and the requirements strict.
5. Supply chain integration
Modern supply chains are tightly integrated. Buyers and suppliers connect their IT
systems for forecasting, inventory management, and planning. Once a supplier is
integrated, it effectively becomes part of the buyer’s operational workflow.
However, this integration also increases risk for suppliers. If a supplier is removed from
the supply chain, returning is extremely difficult, as trust, systems, and processes must
be rebuilt from scratch.
6. Growth of the quality department
3
, Quality departments have become some of the most powerful actors in procurement.
They often decide whether a supplier can be approved at all. Purchasing is not allowed to
buy unless quality requirements are fully met.
Certifications and audits now determine market access. Without meeting these
standards, even a competitively priced supplier will be rejected.
7. Increasing complexity and certifications (HACCP example)
Procurement today requires documented processes for almost every critical activity. In
food supply chains, systems such as HACCP (Hazard Analysis and Critical Control
Points) are mandatory. This system ensures food safety by identifying risks and
controlling them throughout the production process.
Key elements include:
Identifying hazards at each production step
Defining critical control points and safety limits
Monitoring processes and documenting results
Taking corrective actions when limits are exceeded
Verifying that the system works through audits and tests
Maintaining these systems requires continuous documentation, external audits, and
calibrated equipment. For suppliers—especially small ones—this is costly and complex,
often requiring dedicated quality teams.
8. Buying as a specialised strategic function
Overall, purchasing has evolved from a simple logistics task into a strategic management
function. Modern procurement involves risk management, sustainability, compliance,
supplier strategy, quality assurance, and digital integration.
As a result, procurement has become far more regulated, controlled, and documentation-
heavy. While this increases safety and efficiency, it also raises entry barriers for suppliers
and significantly changes how buying and selling are done today.
CASE: HACCP – HAZARD ANALYSIS AND CRITICAL CONTROL POINTS
System to keep food safe by finding risks and controlling them. 7 principles
1. Conduct a hazard analysis: Look at every step in the process and identify what
can go wrong (bacteria, glass, metal, chemicals, wrong temperature, etc.).
2. Establish CCPs (Critical Control Points): Choose the exact steps where you
must control the hazard (e.g. cooking, cooling, metal detection).
3. Establish critical limits: Set clear limits for safety at each CCP (e.g. chicken core
temperature ≥ 75°C, fridge ≤ 4°C).
4. Establish monitoring procedures: Decide how and how often you will check
the CCPs (measure temperature, check time, fill in a form).
5. Establish corrective actions: Plan what to do if a check shows non-compliance
(e.g. re-cook, throw away product, stop the line).
6. Establish verification procedures: Confirm that the whole HACCP system
works (internal audits, lab tests, review of records).
4
ENTREPRENEURSHIP III
THE GLOBAL B2B ENVIRONMENT
FOCUS ON PROCUREMENT
= A bigger term than simply “buying”.
B2B VS B2C
Audience: B2B targets organisations; B2C targets individuals.
Customer Journey: The B2B buying journey is longer, more rational and
involves multiple people. Example: before a car seat supplier is
approved, steps include: technical evaluation, safety testing, price
negotiation, quality audit & long-term contract
In B2C, the customer simply walks into a dealer and buys a car.
Emotional connection: lower in B2B, but still present (trust, risk avoidance).
B2C uses storytelling, emotions, lifestyle (brand identity, feeling, design).
B2B is more rational but still emotional in terms of: trust, perceived risk,
relationship quality with supplier & fear of choosing a bad supplier
o In B2B, the biggest emotional driver is risk avoidance.
Demand & derived demand: derived demand (B2B demand depends on
consumer markets). B2B demand depends on consumer markets. Ex.
Chemical suppliers create polyurethanes → which become foam blocks
→ which become car seats → which go into a car → demand for cars
(B2C) → drives demand for everything upstream (B2B).
If fewer consumers buy cars, Toyota needs fewer seats → fewer foam blocks →
fewer chemicals → B2B demand falls.
Today B2B companies also use: influencers, social media, brand storytelling,
digital ads & emotional branding
The lines between B2B and B2C are not as rigid as before.
The upstream side is all B2B interactions that take place earlier in the supply chain.
Upstream activity is procurement: Because every company in the early supply
chain must procure (buy) materials, parts, technology, and services before they can
produce anything.
So on a business level, upstream = purchasing the inputs needed for production. Each
step involves procurement decisions (supplier selection, contracting, pricing, quality
requirements).
PROCUREMENT
Supply Chain Management → Logistics Management → Procurement → Sourcing &
Purchasing
1
,PROCUREMENT = THE FULL END-TO-END BUYING PROCESS. Procurement covers
EVERYTHING from:
1. Specifying what we need: What materials? What technical requirements? What
quality standards? What quantities? What delivery frequency?
This step defines the exact need of the company.
2. Supplier selection: Searching for potential suppliers, Comparing offers, Visiting
suppliers, Checking quality, capacity, certifications & Negotiating initial terms
This is part of sourcing.
3. Contracting: Final negotiation, Setting price agreements, Signing contracts, Defining
responsibilities, penalties, service levels (SLA) & Long-term relationship decisions
This ends the strategic buying phase.
From here, it becomes operational/logistical buying:
4. Ordering: Sending purchase orders (POs), Scheduling deliveries, Checking availability
& Confirming quantities
5. Control: Tracking deliveries, Monitoring performance, Checking if the supplier meets
quality, timing, and quantity requirements & Managing logistics issues
6. Follow-up: Reporting problems, Claiming when goods are wrong or late, Evaluating
supplier performance, Approving invoices & Maintaining relationship
→ This completes the full cycle of procurement.
Procurement refers to the entire end-to-end process of
buying, starting from defining what the company needs
up to the final follow-up after delivery.
Sourcing is the strategic phase: identifying needs, searching and evaluating
suppliers, selecting the best partner and negotiating contracts.
Purchasing is the operational phase that follows: placing orders, monitoring
deliveries, solving issues, and approving invoices.
In the broad definition, procurement covers every step from specification
to follow-up.
THE PROCUREMENT PROCESS
SOME CHANGES OVER THE PAST 2 DECADES
1. Higher status of the purchasing role
In the past, purchasing was often a minor task within logistics or administration. Today, it
is a specialised profession with a much higher status inside organisations. Buyers are
2
,expected to have strong negotiation skills, analytical insight, and knowledge of complex
procurement and IT systems.
As a result, selling has also become more difficult for suppliers. Large companies no
longer accept informal sales approaches; they require professional counterparts who
understand contracts, compliance, and structured negotiation processes.
2. Direct versus indirect procurement
Procurement is now clearly divided into two categories:
Direct procurement: purchasing materials that directly end up in the final
product (for example ingredients in food production).
Indirect procurement: purchasing goods and services that support daily
operations, such as office supplies, maintenance, or software.
This distinction has increased specialisation within purchasing departments and has
made procurement more structured and controlled.
3. Central procurement and buying groups
Many large companies and retailers now purchase through central procurement
organisations. In retail, supermarket chains often buy centrally—sometimes from an
international headquarters—and then distribute goods to regional warehouses.
This centralisation makes access more difficult for suppliers, but it also creates very large
volumes once a supplier is accepted. Buying groups coordinate sourcing, negotiate
conditions, and impose common rules on suppliers, including sustainability and sourcing
guidelines.
4. Fewer suppliers and the rise of SRM
Companies increasingly work with fewer, but larger, suppliers. This reduces complexity
but increases dependence and risk.
Winning a large client can generate massive turnover.
Losing such a client can have severe financial consequences.
To manage this, organisations invest heavily in Supplier Relationship Management
(SRM) systems. These systems focus on long-term partnerships, performance
monitoring, and compliance. For smaller suppliers, entering such relationships is difficult
because the standards are high and the requirements strict.
5. Supply chain integration
Modern supply chains are tightly integrated. Buyers and suppliers connect their IT
systems for forecasting, inventory management, and planning. Once a supplier is
integrated, it effectively becomes part of the buyer’s operational workflow.
However, this integration also increases risk for suppliers. If a supplier is removed from
the supply chain, returning is extremely difficult, as trust, systems, and processes must
be rebuilt from scratch.
6. Growth of the quality department
3
, Quality departments have become some of the most powerful actors in procurement.
They often decide whether a supplier can be approved at all. Purchasing is not allowed to
buy unless quality requirements are fully met.
Certifications and audits now determine market access. Without meeting these
standards, even a competitively priced supplier will be rejected.
7. Increasing complexity and certifications (HACCP example)
Procurement today requires documented processes for almost every critical activity. In
food supply chains, systems such as HACCP (Hazard Analysis and Critical Control
Points) are mandatory. This system ensures food safety by identifying risks and
controlling them throughout the production process.
Key elements include:
Identifying hazards at each production step
Defining critical control points and safety limits
Monitoring processes and documenting results
Taking corrective actions when limits are exceeded
Verifying that the system works through audits and tests
Maintaining these systems requires continuous documentation, external audits, and
calibrated equipment. For suppliers—especially small ones—this is costly and complex,
often requiring dedicated quality teams.
8. Buying as a specialised strategic function
Overall, purchasing has evolved from a simple logistics task into a strategic management
function. Modern procurement involves risk management, sustainability, compliance,
supplier strategy, quality assurance, and digital integration.
As a result, procurement has become far more regulated, controlled, and documentation-
heavy. While this increases safety and efficiency, it also raises entry barriers for suppliers
and significantly changes how buying and selling are done today.
CASE: HACCP – HAZARD ANALYSIS AND CRITICAL CONTROL POINTS
System to keep food safe by finding risks and controlling them. 7 principles
1. Conduct a hazard analysis: Look at every step in the process and identify what
can go wrong (bacteria, glass, metal, chemicals, wrong temperature, etc.).
2. Establish CCPs (Critical Control Points): Choose the exact steps where you
must control the hazard (e.g. cooking, cooling, metal detection).
3. Establish critical limits: Set clear limits for safety at each CCP (e.g. chicken core
temperature ≥ 75°C, fridge ≤ 4°C).
4. Establish monitoring procedures: Decide how and how often you will check
the CCPs (measure temperature, check time, fill in a form).
5. Establish corrective actions: Plan what to do if a check shows non-compliance
(e.g. re-cook, throw away product, stop the line).
6. Establish verification procedures: Confirm that the whole HACCP system
works (internal audits, lab tests, review of records).
4
