MONOPOLY PRICING

This article is divided into three parts. The first outlines Lenin’s theory and the key ideas necessary to apply it in today’s conditions. The final section applies the Leninist theoretical framework to show that China is not a rising imperialist power, and that even its full development as a capitalist economy is blocked by imperialism. Before looking at China, however, it is necessary to dispense with misunderstandings that prevent Marxists from grasping Lenin’s theory and encourage us to dismiss Lenin as wrong, dated or marginal. There are many distorters of Lenin. Marxist academics, on the whole, are as guilty of this as any party.2 However, ideas held by politically active Marxists have the most important consequences. The International Socialist tendency (IST) is the strongest active Marxist tendency in the English-speaking world today (outside India). Thus the second section focuses on misunderstandings within that tradition and of various writers at one time associated with it.

This article describes the recent changes in the area of sourcing and spend management and it is in line with current calls for more efficient ways to source raw materials and (semi-) finished products and to compare prices of different products versus the market prices. The comparison versus market prices via the traditional tendering process became unusable nowadays as a consequence of the high price volatility since the financial crisis of 2008. We propose new sourcing techniques and new benchmarking techniques already used in a meta-search database containing more than 7,5 billion data points that can be used to determine quickly the supply sources and the value performance of the purchase of a product. This search process includes prices and price comparisons for more than 15000 raw materials, semi-finished products and finished products and is among others based on institutional data.

The current world of is fundamentally different from the one we lived in for the past. The major difference is a steep increase in “bottleneck and partnership products” (Kraljic, 1983, Nellore and Söderquist, 2000; Araujo et. al., 1999) to be supplied as the number of suppliers, the number of available products and the quality of the remaining supply all become more critical and buyers are faced with less suppliers than before spread all over the world and outside their home country. Yet, when time is of the essence, looking for those alternatives, which have moreover become scarce, might just take too much time. Efficient benchmarking might be helpful in this respect. Because of the time pressure, tendering becomes too time consuming and slow. Companies need tools to evaluate and assess opportunities in the market. In the remainder of the paper, we focus on one of these tools, the YQ Matrix. The YQ Matrix (www.YQmatrix.com) is a freely available tool that gives consolidated results in a number of predefined graphs and figures. Typically, these graphs include country, product, user and time-specific information. The YQ Matrix offers quick sourcing and price performance monitoring and makes it possible to have alternative solutions to the ones proposed by Kraljic (1984). The proposed gap procurement performance value makes it possible to do “Creative Time Procurement” since gap analysis enables better procurement timings. Furthermore, standardized sourcing graphs make it possible to do “Creative Geographical Procurement” (Faes and Decocq 2010), two elements that have become a necessity in creative procurement tools.

The IT platform provides the frame and the structured approach for mass data collection and validation.
1. Country selection. The simplest way would be to see if and how much products are traded to or from a specific country. Data can be collected and analyzed from more than 250 countries and dependencies, based on real life data. If desired, countries could be excluded from the analysis. The rationale underlying the country selection as a starting point for the analysis is the following: Instead of analyzing the production potential that might be available somewhere, you initially analyze what peers are already buying/selling on the market. This sourcing tool works under the assumption that if business is already happening there today, price, quality and other elements must be in favor of such procurement business.
2. Detection of emerging markets.
3. Detection of highest volumes and corresponding prices.
4. Detection of lowest prices and corresponding volumes.
The four-step approach has a number of advantages compared to more traditional tools and market research activities. Firstly, the speed of the research is increased drastically. By means of a few clicks and five minutes work, results can be obtained. For an update once the graphs are set, it’s only a matter of seconds. Compared to traditional market research taking each time many weeks, this is a large saving on man-hours. Secondly, the data obtained is objective and precise. Data is retrieved among others from official country statistics and international organizations that provide statistics. Thirdly, the official country statistics and international organization data is updated monthly, the user data is updated daily. Finally, compared to a traditional market study, which is a snapshot of reality, the data shows a truly longitudinal effect.
Procurement performance monitoring
Knowing where to buy is important, but knowing how well you perform is perhaps even more essential. The recent economic crisis has prompted many companies to closely evaluate their spend. This is not a new phenomenon and analyzing the spending exists just as long as purchasing itself, but recently there is particular emphasis on two different fields: the first one is the search for savings opportunities that are present within the company (spend analysis). Recent studies show that companies can save on average 11% of their purchase spend if they use a modern spend analysis system (Aberdeen Group Research, 2008). Even without these systems, purchasing managers could save money by consolidating and analyzing their purchases and supplier base. The second field is benchmarking. Increasingly, purchasing managers are looking outside their own company for ways to save money. Typically, companies are comparing their purchasing performances to the performance of other companies. This process, however, is not as easy as it sounds and involves a lot of data collection and data manipulation in order to get a result that is interpretable and useful for companies. In order to use the data available in the YQ Matrix, we propose a two-step process.

Step 1. Price gap analysis expressing the “price” performance

The price gap analysis is all about measuring and understanding the price delta over time. This delta is the difference between the price that you paid or currently pay and the price that are calculated via benchmark data. These benchmark data could include an index, a combination of relevant prices for the same product, or a combination of prices of different products that compose another product.  Crucial in the information from the benchmark tools is that the gap evolutions are shown. With the latest worldwide internet evolution, prices are not secret anymore. You can find almost all of them on a wide variety of websites. It is the way to achieve them that is proprietary and this achievement progress over time can best be measured through the price gap analysis.
Step 2: Price gap evolution expressing the “value” performance
The price gap evolution is the difference between the average six months price gap and the subsequent price gaps multiplied by the actually purchased volumes showing the procurement performance value versus market. This step quantifies the procurement efforts into an absolute value expressed in the practitioner’s currency.
The price gap analysis and price gap evolution have multiple advantages compared to the traditional approaches. First, companies can measure the gap on a structural basis and not only occasionally. This allows companies to have a structural follow-up of their procurement performance. Second, traditional gap analysis does not always take the volume actually purchased into account. The build-in of the purchased volume is a must. Indeed, a major price gap on ten tons purchased will hardly offset an earlier bad price gap on thousand tons purchased.
From a data collection perspective, there is less bias and manipulation by the market (e.g., compared to market prices assembled via telephone or e-mail). Each graph created on the database and defined as visible to other users is subject to voting by other users (“Like”, “Dislike”, “No opinion”). Whereas this type of crowd voting has so far been used on social media like Facebook, Twitter, … to express an opinion on a topic, the approach here is new as it is used to validate the reliability of the data. This means the YQ Matrix is not only valuable for the industry, but also for the institutional and academic world striving for data confirmation from multiple sources to carry out their academic and institutional studies.
Finally, similar to the four step country selection proposed earlier, results are reached faster and time invested is lower. Especially when prices are volatile, a thorough understanding of the market is necessary. The monitoring tool presented provides a short and long term visibility from which price seasonality and best buying times can be more easily deducted. In this way, it adds to the creative time procurement since it might be better to buy more expensive than the market at the right time than to buy the cheapest at the wrong time.

This article describes a recent trend in the area of sourcing and spend management which is in line with current calls for ways to source raw materials and (semi-) finished products more efficiently. It also covers a new approach to compare prices of different products versus the market prices as the traditional tendering process became unusable. The latter is a consequence of the high price volatility brought about by the financial crisis of 2008. We propose sourcing and benchmarking techniques that are already used in a meta-search database – www.YQmatrix.com - containing more than 7.5 billion data points. These can be used to quickly determine the supply sources as well as the value performance of the purchase of a raw material or a (semi-)finished) product. This search process includes prices and price comparisons for more than 15,000 raw materials, semi-finished products and finished products (http://www.YQmatrix.com/products.php). Login creation is free of charge (http://www.Y...

We use laboratory experiments to evaluate how contestability fares in a situation where the entrant and the incumbent have their own home markets and opportunities to enter each other's markets. The disciplining effect in contestable markets depends crucially on hit-and-run entry. If both the entrant and the incumbent firm have their own home markets then the entrant might not like to hit-and-run.