BUSINESS TO BUSINESS RELATIONSHIPS - WHY IT IS IMPORTANT TO UNDERSTAND THEM WELL, IT'S MORE THAN JUST CLIENT & SUPPLIER TRANSACTIONS
BUSINESS TO
BUSINESS RELATIONSHIPS - WHY IT IS IMPORTANT TO UNDERSTAND THEM WELL, IT'S MORE
THAN JUST CLIENT & SUPPLIER TRANSACTIONS
Transactions take place around us every day in the form of individual to individual, individual to businesses as well as business to business arrangements.
Individual to business transactions like walking into a supermarket and purchasing groceries are simply straight forward with no upfront need for formation of any relationship between the transacting parties.
However the other two i.e. individual to individual and business to business transactions are different and it is important to understand them well in order to
benefit, grow from them and realise synergistic success. This is important especially for business to
business transactions.
In business, through the concept of synergy, well-built and nurtured relationships yield much more than the monetary value of the actual transactions to produce a combined effect greater than the sum of their separate effects.
An shortsighted and detrimental way of business relations is where a client sees themselves as the superior party to the transaction by virtue of the fact that they are giving the supplier their valued money with an option to always settle for an alternative supplier. Be that as it may for the client, the supplier is also a valuable and important party to the transaction especially if they are to supply the required or even exceptional quality goods or services.
It's a mistake to treat suppliers as if they are being done a favour by purchasing things from them.
Businesses mutually need each other within the supply and value chain, one business could be a client of another and a supplier to yet another one.
This means that the roles are always changing as transactions take place hence the need for mutual cooperation, understanding and respect.
Cash is a dynamic resource hence its fluctuation in the reserves of all
organisations with a need to carefully manage their cash flow situations. In the event of tight or weak cashflow circumstances businesses with mutual understanding and synergistic relationships can prop one another up by adjusting terms of trade to cushion the weaker associate business enabling them to navigate
to safety.
However an arrogant, conceited and complacent business will find itself with no associates and partners willing to relax conditions for them in difficult
times, a tough yet avoidable challenge by adopting cooperative stances and building synergies.
We realise that mutual cooperation and respect among businesses especially those operating within the same supply and value chain in order to establish industrial harmony and coherence.
Indeed business to business relationships go beyond transactions, they can have far reaching effects where personalities get involved to a point of informing investment decisions. Well maintained relationships where individual businesses have synergistic cooperation can result in successful mergers whereas difficult relations where there is discord and distrust between parties whose businesses are dependent on each other may result in hostile takeovers with the intention of taking absolute control of strategic resources through mainly vertical integration.
No one is compelled to cooperate in any particular way with other parties regarding their own assets over whom they have control, however goodwill and courtesy guide us in making decisions to cooperate with those that need to exchange goods or services with us for economic gain just as we want to gain economically by trading our products and services with other parties in our businesses.
There is more reward in working together than operating as if we are isolated from those in the same industry as ours or amongst businesses in the wider spectrum of suppliers and consumers of one another's goods and services. If you are in business today you may want to pause and answer the question; "How strong and healthy are my business to business relations right now?"
THE GOLDEN WORD FOUNTAIN - (TGWF)
Transactions take place around us every day in the form of individual to individual, individual to businesses as well as business to business arrangements.
Individual to business transactions like walking into a supermarket and purchasing groceries are simply straight forward with no upfront need for formation of any relationship between the transacting parties.
However the other two i.e. individual to individual and business to business transactions are different and it is important to understand them well in order to
benefit, grow from them and realise synergistic success. This is important especially for business to
business transactions.
In business, through the concept of synergy, well-built and nurtured relationships yield much more than the monetary value of the actual transactions to produce a combined effect greater than the sum of their separate effects.
An shortsighted and detrimental way of business relations is where a client sees themselves as the superior party to the transaction by virtue of the fact that they are giving the supplier their valued money with an option to always settle for an alternative supplier. Be that as it may for the client, the supplier is also a valuable and important party to the transaction especially if they are to supply the required or even exceptional quality goods or services.
It's a mistake to treat suppliers as if they are being done a favour by purchasing things from them.
Businesses mutually need each other within the supply and value chain, one business could be a client of another and a supplier to yet another one.
This means that the roles are always changing as transactions take place hence the need for mutual cooperation, understanding and respect.
Cash is a dynamic resource hence its fluctuation in the reserves of all
organisations with a need to carefully manage their cash flow situations. In the event of tight or weak cashflow circumstances businesses with mutual understanding and synergistic relationships can prop one another up by adjusting terms of trade to cushion the weaker associate business enabling them to navigate
to safety.
However an arrogant, conceited and complacent business will find itself with no associates and partners willing to relax conditions for them in difficult
times, a tough yet avoidable challenge by adopting cooperative stances and building synergies.
We realise that mutual cooperation and respect among businesses especially those operating within the same supply and value chain in order to establish industrial harmony and coherence.
Indeed business to business relationships go beyond transactions, they can have far reaching effects where personalities get involved to a point of informing investment decisions. Well maintained relationships where individual businesses have synergistic cooperation can result in successful mergers whereas difficult relations where there is discord and distrust between parties whose businesses are dependent on each other may result in hostile takeovers with the intention of taking absolute control of strategic resources through mainly vertical integration.
No one is compelled to cooperate in any particular way with other parties regarding their own assets over whom they have control, however goodwill and courtesy guide us in making decisions to cooperate with those that need to exchange goods or services with us for economic gain just as we want to gain economically by trading our products and services with other parties in our businesses.
There is more reward in working together than operating as if we are isolated from those in the same industry as ours or amongst businesses in the wider spectrum of suppliers and consumers of one another's goods and services. If you are in business today you may want to pause and answer the question; "How strong and healthy are my business to business relations right now?"
THE GOLDEN WORD FOUNTAIN - (TGWF)
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