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Mars Incorporated Is A Worldwide Privately Owned Essay

Mars Incorporated is a worldwide privately owned business that operates in both human and animal food products, drinks and other appliances. Due to its large size, the business spends huge amounts of money on its supplies. Through globalization, several markets across the world have opened up and are interlinked providing the business community across the globe with many options of selling their products and services in any market that offers the best selling price. Buyers are in constant search of quality products and the quest for such information is on the rise making online trade and other related transactions to thrive in various economies. By embracing this idea, Mars Incorporated opted for an online procurement auctions system which it considered as the most efficient purchasing process for its worldwide companies. The system was designed with an aim of giving the company value for its money and to build a long-term relationship with its suppliers. The auction-based techniques offered significant savings over the cost of negotiations and a high level of transparency, fairness and efficiency achieved.

There are four basic types of auctions namely; the ascending-bid (open, oral or English) auction, the descending bid (Dutch) auction, the first-price, sealed- bid auction and...

The ascending-bid auction usually starts at predetermined lower price; the auctioneer solicits for further bids in an increasing manner and closes when no further bids can be attracted, the final bidder takes the item at the bid price.
The descending bid (Dutch) auction on the other hand is a type where the auctioneer starts at a higher price than what the item can fetch, he decreases the bid until the first call is made by a bidder. The first bidder to make a call is awarded the item at that particular price without decreasing the price further. First-price sealed-bid auction however, is a type where all the bidders submit their single bids in sealed envelopes after which the envelopes are opened and the highest bidder is announced to receive the item at his bid price. Second-price, sealed-bid on the other hand is a type where all the bidders submit their sealed envelopes after which the highest bidder is announced but gets the item at the price of the second highest bidder.

Auctions are designed to bring efficiency in the purchasing process and to promote competition in the market. The proposed Mar's auction as efficient as it is faces a few implementation challenges. Due to the fact that auctions are pegged on the price,…

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References

Chandrashekar et al., (n.d). Auction-Based Mechanisms for Electronic Procurement. Retrieved September 25, 2012 from http://lcm.csa.iisc.ernet.in/gametheory/survey/proc.pdf

Gail Hohner et al., (2003). Combinatorial and Quantity-Discount Procurement Auctions Benefit Mars, Incorporated and Its Suppliers. Retrieved September 25, 2012 from http://www.scienceofbetter.org/can_do/success_stories/Interfaces/1526-551X-2003-33-01-0023R.pdf
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