HOW CAN COMPANIES BUILD STRONG CUSTOMER RELATIONSHIPS

CLOSER RELATIONSHIS ARE DRIVEN BY SUPPLY CHAIN MANAGEMENT, EARLY SUPPLY INVOLVEMENT AND PURCHASING ALLIANCES

BENEFITS OF VERTICAL COORDINATION

ENGAGINNG IN VERTICAL COORDINATION B/W BUYERS AND SELLERS CREATES VALUE FOR BOTHMARKETING INSIGHT:ESTABLISH COPORATE TRUST, CREDIBILITY& REPUTATION

TYPES OF BYER SUPPLIER RELATIONSHIPS:

BASIC BUYING AND SELLING

SIMPLE ROUTINE CHANGES WITH MODERATE LEVEL OF COORDINATION

BARE BONES

MORE ADAPTATION BY THE SELLER AND LESS COORDINATION BY THE BUYER

CONTRACTUAL TRANSACTION

FROMAL CONTRACTS WUITH LOW LEVEL OF TRUST

CUTOMER SUPPLY

COMPETITIONRATHER THAN COOPERATION IS THE FORM OF

GOVERNANCE

COOPERATIVE SYSTEMS

UNITED IN OPERATIONAL WAYS BUT NEVER DEMONSTRATE STRUCTURAL

COMMITMENT THROUGH LEGAL MEANS

COLLABORATIVE

TRUST AND COMMITMENT LEAD TO TRUE PARTNERSHIP

MUTUALLY ADAPTIVE

BUYERS AND SELLERS MAKE RELATIONSHIP SPECIFIC ADAPTATIONS

CUSTOMER IS THE KING

SELLER ADAPTS TO MEET THE CUSTOMER’S NEED WITHOUT EXPECTING MUCH ADAPTATION IN RETURN

Business risk and opportunism

Establishing a customer supplied relationship creates tension between safeguarding and adaptation

SPECIFIC INVESTMENTS ARE THOSE TAILORED TO A PARTICULAR COMPANY AND VALUE CHAIN PARTNERA CONSIDERABLE RISK TO BOTH PARTIESTRANSACTION THEORY STATES THAT AS THE INVESTMENT IS SUNK , BOTH PARTIES ARE LOCKED IN THE RELATIONSHIP

BUYER IS VULNERABLE CAUSE OF SWITCHING COSTSSELLER IS VULNERABLE DUE TO DEDICATED ASSET KNOWLEDGEHENCE AT TIMES OPPURTUNISM SNEAKS INIT IS SOME FORM OF UNDERSUPPLY OR CHEATING IMPLICIT OR EXPLICIT TO CONTRACT

BENEFITS OF VERTICAL COORDINATION

TYPES OF BYER SUPPLIER RELATIONSHIPS

BUSINESS RISK AND OPPORTUNISM

RISK MANAGEMENT

SUMMARY

THANK YOU

BY YATIN ARORAB.TECH STUDENT DELHI TECHNOLOGICAL UNIVERSITY