There are many different and more beneficial supplier relationships that could be adopted. Increasing competition on the global scale is forcing organisations to focus on business activities where they can develop strong core competencies, leaving all other activities to the most competent suppliers of products or services. Each participant in the supply chain is stimulated to focus on its own core competencies and build them into competencies of the final products of the supply chain. In assuring an uninterrupted flow of high quality input factors at a reasonable price, industrial buyers adopt two alternative strategies:.
1. A customer can promote strong competition between its suppliers, taking.
Advantage of the competition between them to achieve lower prices and better quality. In these adversarial buyer-seller transaction situations, the customer aims to bring down its own production costs at the supplier's expense. This approach is open to large-scale buyers of commodity products, dealing with suppliers who do not have a significant natural monopoly. In these cases, the marketer may apply a transactional marketing strategy towards the buyer, offering a rock-bottom price for a standard quality. .
2. Contrary to this adversary relationship strategy, the customer might find it beneficial to look at the supplier as a long-term reliable partner. Although price is an important factor in the long term, the customer is more interested in securing reliable and competent suppliers rather than in short-term gains achieved by promoting strong competition between suppliers. The buyer views suppliers as partners in building joint competencies in offering quality goods to potential customers. This collaborative relationship approach to the suppliers is appropriate when the supplier's competence is crucial to the customer's core products, and when joint collaboration is the key to success in the integrated supply chain (See appendix 1 for Adversarial v Collaborative model).