In 1999, General Electric and several German companies including Bayer and Deutsche Telekom founded a company computer systems to facilitate the buying process in industrial companies: Goodex. The company, which was initially established in Germany, was growing rapidly in several countries in Europe, beginning with Brussels and into Spain in mid-2000. With a team of highly qualified (PicewaterhouseCoopers consultants specializing in purchases) were quick to grow, reaching the end of 2001 to break even or neutral business.
The company started buying an existing technological tool rather than producing its own, which would have led to large capital investments and time. The Goodex business model was based on 3 pillars or levels:
1. Consulting in the process of buying individual company
2. Parking service offered by Goodex
3. Service contracting and your license
The new client process should begin with the first model and introducing the following variables over time, once you have verified the reliability of the system. In addition, Goodex assured a percentage of the savings obtained the customer, which accounted for 70% of its profits.
What the company offered its clients was a way of reducing monitored costs in purchasing processes of industrial, technological support through increased competitiveness of the bids from multiple vendors through a reverse subsata system.
The company's growth was swift, unlike its competitors, gaining attractive contracts .
Such was its growth in 2003 was acquired by Ariba , another company that offers strategic solutions for cost savings. This acquisition allowed the American company "expand our services incorporating the vision and experience of our software Goodex (...)" , in the words of its CEO Bob Calderoni.
I think this system is perfect when it comes to products or markets in which there is no prior knowledge comprehensive. In these cases, services such as Goodex can offer a lot of offers from suppliers and ensure the best price for the customer. I have found particularly interesting the comment made by the Director of purchasing department of Natural Gas, Jordi Monsech in the interview in the case: the possibility of working with real time information, allowing the department gain confidence and, of course, more rapidly in the purchase process.
However, for markets where product quality plays an important role, this service does not guarantee a minimum quality. Moreover, if suppliers are so forced to lower their prices, is likely to also have to reduce the quality of the product to continue making money. How can companies ensure that the new supplier offering the standard of quality that usually work? We should also take into account the cost of installing or contracting for this service and profitability would be obtained in terms savings. Most likely this cost, plus the training of staff, would be quite high, so that your ROI would be reduced.
do not think this system is recommended for all purchases by companies in their daily activities. In my opinion reserved for those purchases that lack of information by virtue of their investment or the relative importance of quality, could not do it by the method tradicioinal. And what about the developments they are obtained with long-term suppliers? Do not forget that a lasting relationship with a supplier leads to an improvement in the relationship and service and value for money. In this sense, the system does not offer any advantages.
In short, we should make partial use of this tool: only in those cases where the surrounding circumstances would allow me not to do so by the traditional method and in any case to base all management Shopping in it.
As to the viability of the business of Goodex, I think more than proved (according to the information in the case and what I could find on the Internet), providing an advantage competitive with other competitors, thereby increasing their turnover. But it is important to remember that the technological solution available to them had bought, which is freely copyable. Differentiation in any case should come from the hand of his human capital consulting services in the buying process supported by a technological tool would be the ideal recipe for this potion.
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