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Showing posts from July, 2022

Managing A Business's Working Capital Needs With Its Suppliers

  Managing a business's working capital needs with its suppliers is at the core of every successful Supply chain finance program. It benefits both parties , buyers and suppliers. Buyers are generally focused on extending their days' payables outstanding ( DPO) . At the same time, suppliers would prefer to get paid as soon as possible to minimize the number of days sales are overdue (DSO). This dilemma can be resolved through supply chain financing, which offers buyers and suppliers several advantages.     By allowing the customer to extend its payables and simultaneously accelerate payment to the supplier, fintech businesses help both the buyer and supplier increase their working capital. Both parties gain from this, as there is more liquidity and less fluctuation in the timing of payments. With SCF, buyers consent to give a bank or other external financier permission to finance their suppliers' bills leveraging buyers’ credit worthiness . Additionally, SCF offers...

What role does competitive pricing play in a company's ability to stay afloat in its market?

Supply chain management (SCM) deals with various strategic, tactical, and operational decisions, all of which place a premium on pricing. To expand market share and combat emerging competitors, most real-world supply chain finance pricing problems consider competition a critical factor. As a result, practitioners and academics have paid close attention to competitive pricing in SCM in the last four decades.   Businesses use pricing strategies based on competition to stay afloat in the market; they typically have three options when setting prices for their products or services. To take advantage of economies of scale, businesses set lower prices than their competitors to attract new customers and increase sales. If a company provides more benefits and features than its competitors, it will charge a higher price, resulting in a premium product. Price skimming is a competitive pricing strategy used by some businesses to change prices based on their needs. Companies also tend to maint...