Final answer:
Sourcing strategies like single, dual, multiple, and parallel sourcing have different implications for supply risk management and market competitiveness.
Step-by-step explanation:
It can generate risks of lateral monopoly for the buying company: single sourcing
It is an effective strategy for supply risk management, although not the most efficient: dual sourcing
It is used when the objective is to establish short-term, competitive relationships with suppliers: multiple sourcing
It can lead to a price advantage for the buying company in the short term: multiple sourcing
It is an effective but also efficient strategy for supply risk management: parallel sourcing
It means that the company has one, or more, backup suppliers: dual sourcing
In business, different sourcing strategies can influence market power and competitiveness. Single sourcing implies dependence on one supplier, which might lead to a monopoly situation and lateral monopoly risks. Dual sourcing is a more secure strategy, as having two suppliers safeguards against supply risks but may not always be the most cost-efficient. Multiple sourcing tends to foster competitiveness and short-term pricing advantages, while parallel sourcing combines efficiency with the security of supply risk management.