Business Relationships: Supplier Evaluation and Negotiation Strategies

This report analyzes a company's business relationships with its suppliers, focusing on the selection process, key performance indicators (KPIs), and negotiation strategies. The report identifies three key suppliers: The Distributors (food), Socrates Distributors (beverages), and Topdeck (tourism). It evaluates each supplier based on specific KPIs, such as takt time for food suppliers and age limits for the tourism company. Alternative suppliers are proposed for each category, including Bidfood, Beverage Australia, and Australia One, based on their ability to address the existing suppliers' shortcomings. A comparative analysis is conducted, assessing quality, price, payment conditions, service provisions, and reliability. Recommendations are made for supplier selection, emphasizing the benefits of alternative options. The report also details negotiation scenarios with Beverage Australia and Australia One, focusing on pricing and service quality, respectively. The importance of maintaining good supplier relationships and the role of negotiation in contract management are highlighted.

Running head: ESTABLISH AND CONDUCT BUSINESS RELATIONSHIPS
Establish and Conduct Business Relationships
Name of the Student
Name of the University
Author note

1ESTABLISH AND CONDUCT BUSINESS RELATIONSHIPS
Part A
1. List of suppliers selected and their products or services currently provided
Supplier 1: Food- The food materials are supplied by The Distributors in the
company. The supplier provides biscuits like Oreo cookies, melting moments, rainbow
cookies and others. It also supplies grocery items like Irish tea bag, Nescafe blend, caster
sugar, raw sugar, jelly, peanut butter, vegetable oil and many such grocery items.
Confectionary items, healthy, snacks, sugar free items, snacks and other food items are
also supplied by The Distributors.
Supplier 2: Beverage- The beverage products are supplied by Socrates
Distributors in the company. They supply beverages like almond breeze, apple tree fruit
juices, bonsoy milk, calypso, milk lab, nutrient water, protein revival, coconut water,
sparkling water, sparkling ice and several other beverages. Health drinks, energy drinks,
kids drinks are also supplied by the Socrates Distributors.
Supplier 3: Tourism- The tour company named Topdeck has a tie-up with the
company. Topdeck provide tours to the travelers aged from 18 to 39. They offer excellent
trips in affordable prices which is beneficial for the company with which it has a tie-up.
2. Key performance indicators or specifications that is required for the supply of each
product or service from each supplier
The key performance indicator for the food supplier is takt time. The Distributors sometimes
take excess time than the allotted time which hampers the system of the organization where it
supplies its materials. The increase of time leads to the misbalanced work process because if the

2ESTABLISH AND CONDUCT BUSINESS RELATIONSHIPS
raw materials do not reach on the estimated time it becomes difficult for the organization to
fulfill the demands of the customers which eventually effects the reputation of the organization.
The key performance indicator for the beverage supplier is empty running. Socrates
Distributor has complained about the fact of empty running to the organization. According to
Socrates Distributor they travel a long distance with empty vehicle as the organization is really
far from their company and they do not have any other organizations in between which leads
their company to a loss. Due to this empty running they are trying to increase their contractual
rate with the organization which would also hamper the financial statement of the organization.
The key performance indicator for the tourism company Topdeck is their age limit. Topdeck
offers their tours to people who are within the age of 18 to 39 which restricts the availability for
all travelers. The company with which it has a tie-up has different customers from kid to old and
not only youngsters. Therefore the age limit of Topdeck hampers the customers of the
organization which leads to the loss of organization along the decreased customers.
3. Alternative suppliers
The alternate supplier for The Distributors is Bidfood based on the key
performance indicator mentioned earlier. Bidfood has an incredible range of food and
drink, cleaning products, catering supplies and more. It is one of the leading suppliers of
UK to the food service industry which offers complete catering solutions to businesses of
different sizes across the country. The company also provides a huge range of catering
equipment and non-food essentials. Therefore it can be said that Bidfood can be a better
alternative supplier and it would not face problem in takt time because their employee
strength is also high.

3ESTABLISH AND CONDUCT BUSINESS RELATIONSHIPS
The alternative supplier for the Socrates Distributor is Beverage Australia. The
products that they supply are Albarino, Bats Blood, Erdinger, Jever and many others
along with non alcoholic products. Hence Beverage Australia can be a better alternative
supplier because nowadays customers prefer alcoholic beverages more than the non
alcoholic beverages and the different varieties of beer would attract more customers and
they would be satisfied too. Moreover, the key performance indicator that was mentioned
earlier would not be there because they would not have to face empty running much as
the distance between the supplier and the organization is not much and they have other
places to supply in between which decreases their distance of empty running the vehicle.
The alternate supplier or in this case a tie-up tour company is Australia One.
Australia One is a leading Inbound Tour Operator and Destination Management
Company for Australia and New Zealand. The key performance indicator that Topdeck
faced was their age limit but in case of Australia One there are no such criteria of ages
which would help the organization not to lose any customers and their styling of tour
would also help to attract customers which would be profitable for both the tour company
and the organization.
4. Comparison between existing suppliers and alternate suppliers
Food supplier-
 Quality- The quality of the products of The Distributors is better than Bidfood.
 Prices- The prices of products of Bidfood are less than the products of The Distributors.
 Payment conditions- The payment conditions for Bidfood is better than The Distributors.
 Service provisions- The service quality of Bidfood is better than The Distributors.

4ESTABLISH AND CONDUCT BUSINESS RELATIONSHIPS
 Reliability- Bidfood is much reliable than The Distributors.
 Specific needs of the organization- The organizations needs products in huge quantity
within a certain time which The Distributors does not offer and hence the alternative
supplier Bidfood is chosen.
Beverage supplier-
 Quality- The quality of the products of Socrates Distribution cannot be compared with
the products of Beverage Australia as Socrates Distribution completely focuses on non
alcoholic beverages whereas Beverage Australia mostly focuses on alcoholic beverages.
 Prices- The cost of the products of Beverage Australia is definitely higher than that of
Socrates Distribution.
 Payment conditions- The payment condition of Beverage Australia is better than Socrates
Distribution.
 Service provisions- The quality of service of Beverage Australia is better than Socrates
Distribution.
 Reliability- Socrates Distribution and Beverage Australia is equally reliable.
 Specific needs of the organization- The organization need alcoholic beverages more than
non alcoholic beverages and for this reason the organization has chosen an alternative for
Socrates Distribution.
Tourism-
 Quality- The quality of Australia One is better than Topdeck.
 Prices- The cost of Topdeck is lesser than Australia One.
 Payment conditions- The payment condition of Australia One is better than Topdeck.
 Service provisions- The quality of service of Australia One is better than Topdeck.

5ESTABLISH AND CONDUCT BUSINESS RELATIONSHIPS
 Reliability- The tour company Australia One is much reliable than Topdeck.
 Specific needs of the organization- The organizations has different customers of different
age groups so it is necessary to tie up with a tour company who does not have any limit.
Therefore the alternative company is chosen in place of Topdeck.
5. Recommendation based on comparison
Food- Although The Distributors are good enough to supply materials to the
organization still Bidfood is better because they have tremendous varieties of their food
products along with catering materials. The other product varieties of Bidfood are helpful
for the organization because in case of requirement of catering materials they can
consider Bidfood and can have more profit.
Beverages- The cost of the products of Socrates Distributors was less than
Beverage Australia. Despite of the price difference the organization has chosen the
alternative supplier because of the demand of customers for alcoholic beverages. The
customers are ready to pay more for alcoholic beverages and therefore it would not even
affect the financial condition of the organization.
Tourism- The rate of Topdeck is much low than Australia One still company has
chosen the later because of the age limit of Topdeck which was affecting the customers
of the organization.
6. Relationship with existing suppliers
The relationship with existing suppliers is well maintained in the organization. To
maintain good relationship with suppliers the organization communicates with the
suppliers in the regular basis and pays their accounts properly. A good relation is

6ESTABLISH AND CONDUCT BUSINESS RELATIONSHIPS
maintained with the representatives of the suppliers and well communicated prior to the
due date of payment or supply. In case of any problem or issue regarding materials or
products organization directly communicate with the suppliers. The organization also
monitors the financial position of their suppliers by interacting with industry colleagues
and competitors about the general financial stability of the suppliers. They are not
completely negotiated because it is important for an organization to maintain a long term
relationship with its suppliers so that in case of any emergency the organization can take
help from the existing suppliers.
7. Place of negotiation
The business relationships are the keystone of a successful business and the
relationship with suppliers is highly important. Supervising the performance of the
service provision helps in the negotiation phase of new contracts as well as considering
past performances helps to elucidate the required standard and identifies any necessary
amendments. With the help of involving different managers their feedback is considered
in the negotiations and helps to establish any changes needed in the contracts.
Confirmation of the contracts through suitable specialists is essential in case of any issues
in the future. Henceforth, this negotiation will take place in the compound of the
organization itself.
Part B
Negotiation 1
Real Negotiation Simulated Negotiation

7ESTABLISH AND CONDUCT BUSINESS RELATIONSHIPS
Supplier details Beverage Australia
represented by:
Location Sydney
Date 13.03.2018
Nature of negotiation Pricing structure
Details The cost of the products is expensive. The organization
needs the products in a huge amount so it should be
charged as the rate of wholesale market.
Negotiation 2
Real Negotiation Simulated Negotiation
Supplier details Australia One
represented by:
Location Australia
Date 14.03.2018
Nature of negotiation Quality of service
Details The service of the supplier should be extremely high
because the customers are from different age groups and
different class; mostly upper middle class and higher class.

8ESTABLISH AND CONDUCT BUSINESS RELATIONSHIPS