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Advantages And Disadvantages Of Buyer And Customer Relationship In Business

824 Words4 Pages

Burt,Doblar and Starling(2003), have stated that buyer –supplier relationship in recent years has received major attention by many firms. Due to the globalisation of market, fast changing technology, cooperate restructuring and increase in focus on costs, quality, flexibility, shortening product life cycle and an expanded role has emerged. These have made business to become extremely competitive and cooperative hence buyer-supplier relationship is essential for all firms especially in manufacturing companies to survive and acquire reasonable profit and minimise cost. According to business dictionary (2003), relationship in business context is an association between individuals or companies entered into for commercial purposes and formalised with legal contract and agreements. R.Morgan (2004) has stated that there are two types of relationship, which are long term and short term relationships. These two relationship are associated with advantages and disadvantages’ As R.Morgan (2004) states, short term relationship gives the buyer option to switch suppliers for products where the price of materials are easily changeable. Also, the level of competition to win short term contracts allows discounting of prices. However, short term relationships have their disadvantages also. A supplier who is new on short term relationship will want an immediate payment for supplies. Also the opportunity to share market information is reduced since no trust has been established between the

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