Small and medium sized companies are important to the European economy and considered as the true backbone of the European economy, being primarily responsible for wealth and economic growth. Further, the purchasing function of small and medium sized companies had become more and more important to firms within the creating of competitive advantages. Additional, former research emphasizes the need of companies to engage in closer relationships in order to survive in nowadays business environments.

These three issues, - SMEs, its purchasing performance and the relationships the small and medium sized firms are engaged with are interrelated and therefore the essences of the thesis. The thesis is limited to the manufacturing industry due to the potential wide area of small and medium sized companies.

The purpose of the thesis is to examine the purchasing practices of small and medium sized enterprises with a focus on strategic considerations and supplier relationships.

The research project is developed with four single case studies. Participating companies were two small sized manufacturing companies and two medium sized manufacturing companies, defined according to the definition of the European Commission.

The study is built on a critical review of former literature and research findings within the purchasing area and the area of small and medium sized companies. The findings from literature review (frame of references) and the findings from the empirical study were connected in order to fulfill the purpose of the thesis as well as the developed research questions.

In the analysis, the characteristics of SMEs purchasing process were outlined. Evidence for strategic consideration were found and the characteristics of the companies relationships where established.

Small and medium sized enterprises have developed its purchasing performance positively in the comparison to former research findings. By using business technology systems, strategic planning and deliberations and finally through building close and long-term relationships, manufacturing SMEs found a suitable ways to perform its purchasing activities successful and found its place in sophisticated supply chains.