Access to Markets: Landmark Study Reveals Opportunities and Obstacles for Women Business Owners Doing Business with Corporations.
WASHINGTON--(BUSINESS WIRE)--Feb. 4, 2003
A first-ever study released today examines the track record of women's business enterprises seeking entry to corporate markets. While women's business enterprises are earning a significant percentage of their revenues from Fortune 1000 corporations, the study finds that these women's business enterprises only capture an average of 4% of the billions spent annually on outside goods and services In economics, economic output is divided into physical goods and intangible services. Consumption of goods and services is assumed to produce utility (unless the "good" is a "bad"). It is often used when referring to a Goods and Services Tax. .
These findings are from a new study, Access to Markets: Perspectives from Large Corporations and Women's Business Enterprises, conducted by Center for Women's Business Research and commissioned by the Women's Business Enterprise National Council (WBENC WBENC Women's Business Enterprise National Council ), Women Entrepreneurs' Connection at FleetBoston Financial FleetBoston Financial was a Boston, Massachusetts-based bank created in 1999 by the merger of Fleet Financial Group and BankBoston. In 2004 it merged with Bank of America; all of its banks and branches were given the Bank of America logo. and the Ewing Marion Kauffman Foundation. The study surveyed third-party certified See certification. women's business enterprises and Fortune 1000 purchasing executives.
"The importance of this market for women entrepreneurs is irrefutable irrefutable - The opposite of refutable. ," said Susan Bari, president of Women's Business Enterprise National Council. "Fifty-six percent (56%) of the revenues of women's business enterprises with $1 million or more in sales came from large corporations, and 40% of the revenues of companies with revenues below $1 million. Clearly, women business owners Many online and offline organizations have been created to collect information about businesses around the world owned and operated by women. Many other organizations have been created to assist the women that own and operate those businesses. , regardless of the size of their firm, should not overlook the corporate market place."
While showing that many women are successfully selling to large corporations, the study also found that many challenges still remain. The top challenges cited by women entrepreneurs include: learning about opportunities (70%), reduction in the number of opportunities due to the bundling of smaller contracts into fewer large contracts (50%), and the increasing need for corporate cost cutting (45%).
The challenges cited by corporations with supplier diversity Supplier Diversity is a business program that encourages the use of previously underutilized minority owned vendors as suppliers. It is not directly correlated with supply chain diversification, although utilizing more vendors may enhance supply chain diversification. programs mirror those of the women seeking to sell to them. Fully 86% of corporate purchasing executives interviewed say that the push to cut costs is having an impact on purchasing and diversity efforts and 81% cite vendor consolidation. In addition, an average of just 38% of each corporation's spending is up for renewal or rebidding each year, decreasing opportunities for new vendors even more. Bundled contracts result in fewer contracts available for bidding.
Due to the growing practice of bundling contracts, many large corporations (79%) report extending their diversity efforts into working with 1st-tier suppliers to increase supplier diversity among 2nd- tier contractors. Sixty-one percent (61%) report that they measure the use of women and minority business enterprise suppliers by 1st-tier contractors. Yet, only 20% of the women business owners in the study reported that when their bid for a 1st-tier contract was not successful that supplier diversity personnel put them in touch with the 1st- tier supplier for a 2nd- tier opportunity.
Despite this, the share of women's business enterprises with 2nd- tier contracts has grown from 18% to 22% while the share with 1st tier contracts has declined from 80% to 74% over the past three years.
"Women business owners are using a variety of strategies to counter these corporate realities," said Teri Cavanagh, senior vice president and director of the Women Entrepreneurs' Connection at FleetBoston Financial. "Nearly half the women surveyed (45%) report that they have formed a joint venture or strategic alliance to bid on an opportunity with a large corporation."
Women who were successful in obtaining corporate contracts have formed relationships inside the corporations as well. Ninety-seven percent (97%) of women entrepreneur respondents In the context of marketing research, a representative sample drawn from a larger population of people from whom information is collected and used to develop or confirm marketing strategy. rated relationships with decision makers as a key success factor in doing business with large corporations; 70% cited relationships with purchasing personnel or end users; and 66% named relationships with other suppliers.
Large corporations with strong supplier diversity efforts in place say that doing business with women and minorities is a matter of good business practice. Forty-three percent (43%) of companies that rated themselves as having a good supplier diversity program say that their company's rationale for doing business with women- and minority-owned enterprises is that these firms offer competitive prices and quality products and services. Corporations that do not give their diversity programs high marks are more likely to say that their company's rationale is that the changing demographics The attributes of people in a particular geographic area. Used for marketing purposes, population, ethnic origins, religion, spoken language, income and age range are examples of demographic data. of the U.S. indicate that women and minorities are increasingly important (56%).
There is a range of practices utilized by corporate supplier diversity programs. Almost all (95%) of the corporations with strong programs have a list or database of women and minority enterprise suppliers available to all company buyers, 80% of these companies have active CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. involvement in setting and communicating policies and goals, and 69% have a specific written goals for women business enterprise purchasing.
When asked what corporations can do to facilitate women's business enterprises doing business with large corporations, the women surveyed listed having names of contacts (9%), having corporations which actually want to have women-owned suppliers (8%), networking opportunities (8%), getting face-to-face meetings (8%), training on how to navigate (1) "Surfing the Web." To move from page to page on the Web.
(2) To move through the menu structure in a software application. the process (7%), notification of opportunities (7%) and referrals and introductions (6%).
"Despite the challenges facing them, women entrepreneurs are very optimistic op·ti·mist
1. One who usually expects a favorable outcome.
2. A believer in philosophical optimism.
op about the corporate market," said Jasmin Rodriguez, manager of women's entrepreneurship initiatives at the Ewing Marion Kauffman Foundation. "Fully nine in ten (91%) of the women business owners surveyed, both those currently marketing to Fortune 1000 companies and those who are not, expect to be doing business with large corporations over the next three to five years."
The report, Access to Markets: Perspectives from Large Corporations and Women's Business Enterprises is available for $90. (Discounts are available for Center corporate partners and NAWBO NAWBO National Association of Woman Business Owners members.) For further information, contact: Center for Women's Business Research, 1411 K Street, NW, Suite 1350, Washington, DC 20005-3407, phone: 202-638-3060, ext. 16, email: email@example.com, Web site: www.womensbusinessresearch.org.
Center for Women's Business Research
Center for Women's Business Research, founded as the National Foundation for Women Business Owners, is the premier source of knowledge about women business owners and their enterprises worldwide. The Center provides original, groundbreaking research to document the economic and social contributions of women-owned firms, and consulting and public relations public relations, activities and policies used to create public interest in a person, idea, product, institution, or business establishment. By its nature, public relations is devoted to serving particular interests by presenting them to the public in the most services to maximize the benefits of this knowledge. Corporations, government policy makers, educators, organizations, the media, and individuals rely on the Center's leading-edge knowledge to strengthen their support of women business owners. For more information about the Center, visit www.womensbusinessresearch.org.
Women's Business Enterprise National Council
The Women's Business Enterprise National Council is dedicated to enhancing opportunities for women's business enterprises. In partnership with women's business organizations throughout the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. , WBENC provides a national standard of certification and serves as the nation's leading third-party certifier cer·ti·fy
v. cer·ti·fied, cer·ti·fy·ing, cer·ti·fies
a. To confirm formally as true, accurate, or genuine.
b. of businesses owned and operated by women. WBENC also provides its corporate members and certified women's business enterprises (WBEs) with access to a range of B2B (Business to Business) Refers to one business communicating with or selling to another. See B2B e-commerce, B2C and B2G.
B2B - business to business sourcing tools including, an Internet database - WBENCLink - that contains information on certified women's businesses for purchasing managers A Purchasing Manager is an employee within a company, business or other organization who is responsible at some level for buying or approving the acquisition of goods and services needed by the company. nationwide. WBENC provides a dynamic resource for the more than 500 US companies and government agencies that rely on the WBENC certification as an integral part of their supplier diversity programs.
Through its benchmarking surveys and ongoing interaction with certified women's business enterprises, WBENC has become the nation's leading source of information on trends in supplier diversity programs for WBEs at US companies and government agencies. WBENC also promotes best practices in supplier diversity through the annual selection of "America's Top Corporations for Women's Business Enterprises." For more information, visit www.wbenc.org.
Women Entrepreneurs' Connection, FleetBoston Financial
Women Entrepreneurs' Connection, FleetBoston Financial was established in 1998 and is dedicated to meeting the financial and strategic needs of women-owned and women-led businesses by connecting them to capital, information and networking support. A unit of FleetBoston Financial, the Connection began a $2 billion initiative in 2000 to provide equity, debt and advocacy support to women business owners. FleetBoston Financial is the seventh-largest financial holding company in the United States and is a diversified financial The diversified financial services segment includes a range of consumer and commercially-oriented companies offering a wide variety of products and services, including various lending products (such as home equity loans and credit cards), insurance, and securities and investment services company with assets of $190 billion. Fleet is listed on the New York New York, state, United States
New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of and Boston Stock Exchanges The Boston Stock Exchange (BSE) is a regional stock exchange located in Boston, Massachusetts. The third-oldest stock exchange in the United States, it was founded in 1834. On October 2nd, 2007 Nasdaq agreed to acquire BSE for $61 million. (NYSE NYSE
See: New York Stock Exchange , BSE See Bombay Stock Exchange.
See Boston Stock Exchange (BSE). : FBF FBF Forearm Blood Flow
FBF Frankfurt Book Fair
FBF Feedback Form
FBF Frame by Frame (animation technique)
FBF FleetBoston Financial Corporation (stock symbol)
FBF Fundamental Baptist Fellowship ). For more information, visit www.theconnection.fleet.com.
Ewing Marion Kauffman Foundation
The Ewing Marion Kauffman Foundation works with partners to encourage entrepreneurship across America and improve the education of children and youth. The Kauffman Foundation was established in the mid-1960s by the late entrepreneur and philanthropist Ewing Marion Kauffman. More information about the Kauffman Foundation is available at www.emkf.org
Methodology Note: This nationwide study was conducted via two Internet surveys and was launched on September 5, 2002. An announcement of the study with a link to the corporate questionnaire was sent via e-mail and hard copy to corporate purchasing executives listed in "Purchasing People in Major Corporations". A separate announcement of the study, with a link to the women business owner questionnaire, was sent via e-mail to women's business enterprises who were currently certified with WBENC or whose certification was pending or had lapsed LEGACY, LAPSED. A legacy is said to be lapsed or extinguished, when the legatee dies before the testator, or before the condition upon which the legacy is given has been performed, or before the time at which it is directed to vest in interest has arrived. Bac. Ab. Legacy, E; Com. Dig. . Certification as a women's business enterprise requires 51% or more ownership by a woman or women and demonstrated management and control of business operations Business operations are those activities involved in the running of a business for the purpose of producing value for the stakeholders. Compare business processes. The outcome of business operations is the harvesting of value from assets by a woman.
A total of 97 surveys were completed by corporate purchasing executives: 92 via the Web and 5 via fax or hard copy. With completed surveys from 97 of 713 e-mails and hardcopies sent, the response rate is 13.6%. The sampling error for a sample size of 97 is +/-10.0% at the 95% level of confidence. This means that, 95 times out of 100, survey results will be within 10.0% of true population values.
Comparisons among corporations are also made based on annual revenues. Among corporate purchasing executives, 26 are with companies with 2001 revenues of under $5 billion and 64 are with companies with 2001 revenues of $5 billion or more. Seven companies did not disclose their 2001 revenues. The sampling error for a sample size of 26 is +/-19.8% at the 95% level of confidence and the sampling error for a sample size of 64 is +/-12.7%. This means that, 95 times out of 100, survey results will be within 19.8% and 12.7%, respectively, of true population values.
A total of 442 surveys were completed by women's business enterprises via the Web. With completed surveys from 442 of 2120 e-mails, the response rate is 20.8%. The sampling error for a sample size of 442 is +/-4.8% at the 95% level of confidence. This means that, 95 times out of 100, survey results will be within 4.8% of true population values.