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Hi Ken,
I don’t understand why the Procurement does not belong to Direct cost (primary activities). My understanding of Procurement is the purchase of raw materials for the products. Or am I wrong?
Many thanks in advance!
I have always thought it’s a bit odd too, but it’s how dear Mr Portermset it out.
The justification is that procurement covers all purchasing, not just material or goods for resale. So, purchase of non-current assets is there. Therefore, this support activity can span all the primary activitiew (eg paying for the design of a better website to enhance sales and marketing).
However, it is likely that most procurement effort is spent on the purchase of raw material.
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