Solution

Pricing Strategy of the Supplier

Knowledge of the suppliers’ pricing structure helps the organization to plan for the costs in advance and even look for better deals. The analysis here is carried out with respect to supplier cost structure, supplier market position and developments in prices.

Supply Market Analysis

Supply market analysis evaluates the supplier market in terms of key strengths, weaknesses, opportunities and threats. It looked at the general trends, competitors, availability of suppliers and complied with the regulatory measures. In the case of ROSHN, this might imply ascertaining if other suppliers provide similar products or if there are supply chain adverse effects related to certain suppliers.

Porter’s Five Forces

Figure 4: Porter’s Model

Source:

Porter’s Five Forces is a tactical tool used to draw patterns of competitive forces in the market. Its five elements are as shown in figure 4  as highlighted by (‌Planium Pro (2021):

Threat of New Entrants: The threat posed by new entrants that make the market competitive to existing players and this may lead to adjustments in the prices to fit the market trends.

Bargaining Power of Suppliers: The power suppliers have to control price, terms and conditions, and availability of a product or a service.

Bargaining Power of Buyers: The bargaining power that the organisation has that it can negotiate with the suppliers for better terms.

Threat of Substitutes: There being other similar product that could do the same job and could be used by the customers instead.

Competitive Rivalry: How intense competition is within existing suppliers that affect pricing and overall quality of services supplied.

PESTLED Analysis

The PESTLED model helps analyse external factors affecting the negotiation environment as evidenced by CIPS (2024). Elements include:

Table 2:PESTLED Analysis

Source: CIPS (2024)

Kraljic Matrix

The Kraljic Matrix categorizes products or services based on supply risk and profit impact as shown in figure 5:

Figure 3:Kraljic Matrix

Source: CIPS Module Notes

Strategic: High impact, high risk—requires a long-term partnership with a reliable supplier.

Leverage: High impact, low risk—where the organisation can exert more control.

Bottleneck: Low impact, high risk—requires strategies to mitigate supply risk.

Non-Critical: Low impact, low risk—where price is the main consideration.

For ROSHN, sourcing a supplier for sustainable materials may fall into the Strategic quadrant, necessitating careful selection and a strong relationship.

Supplier Preferencing

Figure 4:Supplier Referencing Matrix

This model determines the extent to which suppliers’ perceptions of their clients are positive, according to value and interaction. Classification of the groups are: Core which has high value and is highly engaged, Development which is highly engaged but low value, Exploitable is highly valuable and less engaged and Nuisance is low value and less engaged (‌Marshaine and Marshaine, 2024). As for ROSHN, it simply may indicate what exact position within this value chain the company occupies and what corresponding strategy should be chosen for negotiations.

SWOT Analysis

SWOT Analysis (Strengths, Weaknesses, Opportunities, Threats): It is useful when the organisation casts a look on its internal environment in terms of strength and weaknesses and the external environment in terms of opportunities and threats to enable it devise a good negotiation strategy (see table 2).

Table 3:SWOT Analysis

Source:

Supplier Analysis

For the collected data, it was gathered through the methods of website analysis, chairperson statement analysis, and Key Account Management (KAM) to get an in-depth understanding of the supplier’s objectives and strategies to follow for ROSHN.

Therefore, the Preparation stage involves three principal tasks: gathering internal data, market analysis, and supplier understanding is key to offering negotiator tactical advantages. Strategists such as Mendelow’s Matrix, Porter’s Five Forces, PESTLED, Kraljic Matrix, Supplier Preferencing and SWOT analysis assist ROSHN to ensure it set goals and objectives in the right perspective with the right projection of challenges as well as strategize the best defensive orantageous position during negotiation. In this manner, ROSHN guarantees that through proper preparation, it will be able to negotiate the kind of terms it wants into the contracts more or less and establish long term suppliers.

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