Business Development: Beverage Supplier Contract Assessment Report

This report presents a comprehensive assessment of beverage suppliers, focusing on contract provisions and negotiation strategies. Part A evaluates the current supply arrangements of three key suppliers (Newburgh Banana Inc, Mithuna Foods Company India, and Raphpull Medic Group) relevant to beverage blending, comparing their performance against key performance indicators like product quality, pricing, and delivery. The analysis identifies alternative suppliers, such as Chiquita Brands International Inc and Dole Food Company, based on factors like cost, quality, and transportation. Part B details formal negotiations with two suppliers, Newburgh Banana Inc and Dole Food Company, covering pricing, delivery, and payment terms. Part C outlines the formal agreements, communication, and relationship-building skills employed, including email confirmations and feedback on the negotiation outcomes. The report emphasizes the importance of supplier relationship management, communication channels, and monitoring in maintaining successful business-to-business relationships. The recommendations highlight the strategic importance of supplier selection based on factors such as cost-effectiveness, product quality, and reliable delivery to support a low-cost leadership strategy.

Assessment
Student Name:
Student Number:
Module Code:
Submission Date:

Introduction
This paper presents an assessment concerning my ability to complete tasks that were
outlined in the elements and performance criteria of this unit in the context of the job role. This
paper focuses on three parts. Part A reviews the current supply and contract provisions in place
for 3 suppliers that are relevant to beverage blending as my area of work. The objective is to
establish new business relationships through determination of alternative supplier provisions.
Part B presents a formal negotiation and management of an agreement and contracts with two
different suppliers. The objective is to determine conditions involving new supply agreements.
Part C demonstrates the use of a high high-level communication and the relationship building
skills when conducting formal negotiations and making of commercially significant business-to-
business agreement in established relationships.
1. Part A: Three Suppliers
Suppliers 1 2 3
Newburgh Banana Inc Mithuna Foods
Company India
Raphpull Medic Group
Products
supplied
Bananas, mangoes,
plantains, pineapples,
and avocados
fresh mango pulp specializes in supply of fresh
red onion, fresh cassava roots,
fresh tomatoes, and fresh
green peas

2.
Key performance indicators/specifications required for the supply of each of each
product from each of the above suppliers
 Mangoes
 High quality mangoes should be green in colour with oval shape
 High of mangoes should be one that;
 Does not have spots
High quality mangoes should be clear in green or yellow colour
The mangoes should be in such a way that;
 Are not fluffy
Financial benefits – lower price and discounts with sizes
Environmental resistance – does not go bad easily when exposed to extreme
temperatures
Capable to stay for some few days to meet customer nutritional value/requirements
 Bananas
Quality of banana fruit in terms of;
 Skin colour
 Shape
 Size
 Nutritional value
 Strong flavor
Quality – consistency and reliability of banana products
 Pineapples

 Skin colour
 Shape
 Size
 Nutritional value
 Strong flavor
Quality – consistency and reliability of banana products
Delivery – Performance according to the schedule
3. Alternative suppliers to identified suppliers
Supplier of mangoes: Chiquita Brands International Inc foods
Description Particulars
1. Price (per kilogram) USD 20/kg mango
2. Supply (per day) mango 20 cartons
3. Transportation charges $3 per carton
4. Extra supply (for buffer purposes mango: 5 cartons
Supplier of Banana: Purcell International
Description Particulars
1. Price (per kilogram) USD 20/kg
2. Supply (per day) 20 cartons
3. Transportation charges $2 per carton
4. Extra supply (for buffer purposes banana: 5 cartons
Supplier of Pineapples: Dole Food Company
Description Particulars
1. Price (per kilogram) USD 20/kg
2. Supply (per day) 20 cartons
3. Transportation charges $2 per carton
4. Extra supply (for buffer purposes mango: 5 cartons

4. Advantages and disadvantages
The attachment of the summary provided in the appendix section
5. Recommendations
The above comparison brings out the need to replace Mithuna Foods Company India
Company with Dole Food Company. Such a replacement will consider a number of factors such
as the quality of products, prices, the payment conditions, reliability and service provision. In the
first case for example, quality of inputs play a central role for a company that seeks to convert
the raw materials or components into finished valuable products. While the two companies
supply high quality products, distance of transportation remain an important component in any
supply chain Florian (2013). The supplier transports mangoes from India to our company. This
implies that such a perishable product cannot take long without going bad in cases of
uncertainties.
Prices charged by suppliers on their products play a key role in determining the final
price of a product. Florian (2013) maintain that prices also determine the nature of marketing and
competitive advantage strategies a firm is likely to design. The need to replace one of the
suppliers is because the decision of a company to buy low costly products from companies that
do not spend much on freight. Furthermore, the company currently offer low-cost leadership
strategy. The sustainability of such a strategy can only depend on suppliers that offer relatively
lower costs for the inputs.
6. Supplier relationship management considerations
The supplier relationship management presents a good opportunity to create a successful
strategic sourcing of the best suppliers maintaining relationship. Wieteska (2016) explains that
this involves creation of a strong partnership with key existing suppliers in order to reduce on

costs, come up with new innovative products, and create value for both parties. In the case of our
company and already existing suppliers, relationship is managed through communication,
monitoring, and provisions.
In a business environment where competition is an everyday thing, businesses must
ensure that they implement on an effective customer relationship management strategies. Our
business has managed to come establish a number of communication channels. This implies that
the business now utilizes on a multiple ways to communicate with existing suppliers. The
channels include offline and online techniques. Kooli, Mansour and Cornwell (2016) maintain
that establishing more communication channels is important for a business-to-business
relationship. It makes it possible for management to interact with customers and serve their
needs. While there are several ways that a business can communicate with its customers, the
business managed a strong relationship with existing suppliers through formal channels such as
postal correspondence, phone calls, email, short message services, and video conferencing.
Monitoring has also been adopted in the business to help create and maintain a strong
relationship with already existing customers. Just as explained by Kusari, Hoeffler and Iacobucci
(2013), is that monitoring play a key role of capturing the efforts of a buyer in order to verify and
supervise performance of a supplier. While monitoring can take a multifaceted approach, out
businesses tend to focus on output or performance monitoring of suppliers. For instance, we
adopted a traditional supplier survey. The company measures the performance of suppliers
through a four-item scale adopted by Qi, Zheng and Bin (2013). For example, the form of questions
presented in such a survey focuses on asking the respondents to rate the performance of suppliers
on varying metrics such as the rate of product delivery, and delivery performance. Besides,
Cockayne (2016) explains that managers can measure satisfaction through alternative scales.

PART B: conducting Negotiations
Negotiation 1
Real Negotiation
Supplier Details Newburgh Banana Inc
Address: 111 Dickson St, Newburgh, NY 12550, USA
Phone: [phone]
Represented by:
Logistics Manager
Mr. Charles Peterson
Location NY
Date November 16, 2017
Nature of
negotiation
Pricing structure, quality, delivery time, and packaging
Details The negotiation involved agreeing on how an existing supplier
would supply mangoes and bananas that meet a number of aspects.
The first aspect targeted at the pricing strategy. While there are
different pricing strategies that could be used, the negotiation
required a company that can charge discounted pricing strategy.
The second aspect of negotiation-involved understanding the
delivery status of the products. The supplier understood that the
company specializes in processing of fresh mangoes and bananas.
Hence, delivery days were more critical to avoid Mangoes from
spoiling
Third, the negotiation also focused on payment conditions.
Negotiation 2
Real Negotiation
Supplier Details Dole Food Company, Inc.
Represented by:
Logistics Manager
Samuel Northrup Castle
and Amos Starr Cooke
Location California
Date November 10, 2017
Nature of
negotiation
Pricing structure, delivery time, and packaging
Details The negotiation involved agreeing on how a new supplier as an
alternative supplier, would supply pineapples that meet a number of
aspects.
For example, the aspect involved agreeing on the pricing strategy.
Management indicated the need to use discounted pricing strategy.
The second aspect of negotiation was on the mode and rates of
delivery. The supplier understood that the company specializes in
processing of fresh pineapples. Hence, delivery days were more

critical to avoid from spoiling
Third, the negotiation also focused on payment conditions.
PART C: Making formal agreements
Supplier 1: Newburgh Banana Inc Approved Not
approved
Recommended
change
Contractual detail 1
Price Bananas and mangoes using discounted
pricing strategy
yes
Contractual detail 2
Negotiation agreed on the delivery status of the
products. Management agreed to deliver the
products on a daily basis except on weekends
yes
Contractual detail 3
Negotiation focused on the payment methods. The
supplier agreed to receive payments through
written bank cheques after confirmation of
delivery and quality assurance on a monthly basis
yes
Supervisor NAME
Supervisor signature
Date
Supplier 2: Dole Food Company, Inc. Approved Not
approved
Recommende
d change
Contractual detail 1
Use discounted pricing strategy on pineapples
based on quantity of pineapples purchased
Waiting
approval
Contractual detail 2
Delivery fresh pineapples three times per week on
Monday, Wednesday, and Friday. The delivery to
take effect from the first day of next month
Waiting
approval
Contractual detail 3
Receive payments after confirmation of non-
spoiled pineapples. The payment to follow after
the supplier provides an invoice claiming payment
Yes
Supervisor NAME
Supervisor signature
Date

2. Feedback
Supplier 1 outcome Appr
oved
Not
appro
ved
Details negotiated
The negotiated items covers the quality of
products. Most importantly, the supplier
indicated that they will abide by the three
aspects including pricing strategy,
delivery, and payment procedures
The objective of such a negotiation is to
ensure increased quality of mangoes and
bananas. Therefore, because of ordering in
large quantity, the negotiation will help
reduce the transportation cost and selling
prices
The supplier prefer to continue with the
relationship created in order to conduct
delivery of products. The supplier will
have to commit to a first year volume of
mangoes and bananas
The supplier agreed to the three
aspects and show a complete
commitment. Furthermore, the
supplier might also at own
discretion to select own policies
regarding the three aspects. This
is provided the supplier meet
the minimum requirements.
yes
Supplier 2 outcome
Details negotiated
The supplier agreed to observe three
aspects before and after supplying
pineapple products as the company. It is
through the aspects of delivery, pricing,
and payment that will help strengthen the
relationship.
The supplier agreed to continue
with the new relationship. This
was considered on the basis that
the company had not had any
previous relationship with the
alternative supplier.
Furthermore, the company
agreed that they would be
having a five-year relationship
in supply of pineapples.
Yes

3. Emails
November 16, 2017
Newburgh Banana Inc
111 Dickson St, Newburgh,
Phone: [phone]
NY 12550, USA
Dear Mr. Charles Peterson
RE: AGREEMENT CONFIRMATION
According to the contractual agreement that we have had recently, I write to you in order to
confirm our agreement on the contract we made on November 10, 2017. It is my hope that you
will be able to find notice an important notification the legal constraints concerning the
agreement and provides us the need to continue relating on a legal background.
Furthermore, I also wanted you to understand that the company now acknowledges and
appreciates your committed spirit for the coming years. Since we established the first, we have
continued to use other suppliers of fresh agricultural products. This explains the reason as to why
we saw the need to approach you to become our important partner.
Please note that I will be finalizing the formal agreements for the signing of all the parties
responsible. In case you come up with any issue or question that require further clarification
about our partnership, please, fill free to contact me in person through 555-340-3443 or just
email me at [e-mail]
Yours Sincerely,
Felix C. Colman

November 16, 2017
Dole Food Company, Inc.
Phone: [phone]
California, USA
Dear Mr. Samuel Northrup Castle
RE: AGREEMENT CONFIRMATION
According to the contractual agreement that we have had recently, I write to you in order to
confirm our agreement on the contract we made on November 10, 2017. It is my hope that you
will be able to find notice an important notification the legal constraints concerning the
agreement and provides us the need to continue relating on a legal background.
Furthermore, I also wanted you to understand that the company now acknowledges and
appreciates your committed spirit for the coming years. Since we established the first, we have
continued to use other suppliers of fresh agricultural products. This explains the reason as to why
we saw the need to approach you to become our important partner.
Please note that I will be finalizing the formal agreements for the signing of all the parties
responsible. In case you come up with any issue or question that require further clarification
about our partnership, please, fill free to contact me in person through 555-340-3443 or just
email me at [e-mail]
Yours Sincerely,
Felix C. Colman