Answer to Question #118394 in Management for Rorisang

Question #118394
In order for the Shoprite group to become a successful organisation it has had to focus on effective collaborations. Discuss the various types of buyer-supplier relationships and determine which of these relationships the Shoprite group has with its suppliers. Provide reasons for your answer
Expert's answer

Buyer-Seller Relationship

Maintaining the commercial transaction between buyers and sellers can be challenging since each party wants to maximize its cash investment. However, considering the risks in the ever-changing business environment, buyers and sellers should build strong relationships to maximize their value for their money. Collaborative, transactional, and alliance are the major types of buyer-supplier relationships.

The transactional buyer-seller relationship is a short-term relationship that often involves a single transaction. In this liaison, there is little or no trust, and each party is concerned with its well-being. On the other hand, the collaborative relationship involves working for the future prosperity of both the buyers and the sellers. Therefore, in this relationship, there is mutual benefit and some level of trust. Alliance relationships are established to improve communication between the two parties to eliminate any uncertainty. On this note, Shoprite Group Companies, an American food retailer, has developed an alliance with its suppliers by providing them with access to extensive economic opportunities through a centralized distribution model. The firm also offers planning and training to its suppliers to ensure a mutual benefit. The relationship between the Shoprite Group and its suppliers contributes to the company’s success.

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