Types of buyer-supplier relationship

1. Transactional relationships. A transactional relationship can be defined as a straightforward relationship between buyer and seller wherein the two parties do not get closely involved with each other, but simply exchange goods or services for payment. It has a short-term orientation and is seen as an arm's-length relationship; emphasis is on price, quality and delivery, and there is little sharing of information. Most types of relationship are transactional and are usually a once-off deal for a specific item for a specific use; for example, the sale and purchase of a house, where the seller would want a price as high as possible and the buyer would want a price as low as possible.
2. Collaborative relationships, Buyers and sellers recognise a need for cooperation in order to achieve cost effectiveness, quality and on-time delivery. Therefore, buyers aim to build collaborative relationships with suppliers. define a collaborative relationship as "the process by which two or more parties adopt a high level of cooperation to maintain a trading relationship over time". For example, in the South African automotive industry, original equipment manufacturers tend to adopt a long-term view on supplier relationships and consider these relationships as collaborative.

3. Alliance relationships. The main distinction between collaborative and alliance relationships is the existence of institutional trust - prudent trust, which is carefully de-signed, planned and mutually agreed upon.

When alliance relationships are first formed, this trust is usually established interpersonally between the alliance champions and the executives who create this unit. For example, at Toyota, suppliers are referred to as "business partners" and Toyota works with them through long-term relationships in an effort to realise mutual growth, based on mutual trust.

.2 There are three types of buyer-supplier relationships that an organisation can engage in. Q.3.2.1 Explain the three types of buyer-supplier relationships using original practical examples for each. Note: - You are to explain the factor in your own words. - More marks will be awarded for providing an original example not found in your prescribed textbook or Learn. .2 There are three types of buyer-supplier relationships that an organisation can engage in. Q.3.2.1 Explain the three types of buyer-supplier relationships using original practical examples for each. Note: - You are to explain the factor in your own words. - More marks will be awarded for providing an original example not found in your prescribed textbook or Learn