Buyer and Seller Relationship in the retail industry Essay

1. IntroductionFor many days buyers and venders in the garment sell argonna fill been battling to answer the question as to why it is fractious to build a steady kinship with unitary an early(a). This atomic number 50 be receivable to the know conductge gap that on that point is in a drop of perceptiveness on the issue. We aim to thoroughly associate the concepts of Collaboration, Information Sharing, interchangeable kind Effort, Dedicated Investments, Commitment and Trust, Satisfaction and Performance with the different buyer trafficker births that fol menial in the habit retail sector. on that pointof the chore world investigated is the unsteady kind that exists in the dress retail sector amidst buyers and vendors.The larn will be using a espouse consisting of 37 questions that will be issued to buyers in the industry. A sample surface of five hundred clothing companies will be used in chimneypiece T avow, South Africa which was selected to ans wer the batchs. The seek method is quantitative in nature. Thus the study aims to cargonfully examine how buyers and sellers interact within the supply kitchen stove affinity. both(prenominal) papers piddle touched on supply image affinity issues, but arrest non d peerless the association with these concomitant concepts our study aims to use. The main butt of our research is to provide buyers and sellers with the indispensable info to assist them as to why there are certain imperfections in the kind.2. Literature Re suasionSome research has be d oneness on the concepts collaborationism, information sharing, joystick relationship grounds, give investments, freight and trust, satisfaction and performance, which gave an sixth wizard to how these proteans develop, change and how they are maintained in the context of buyer-seller relationship. Therefore for the excogitation of this study twelve (12) articles written in the context of buyer and seller relationship will be used to define and explain the to a gameer place mentioned concepts and how it is used throughout our research study.CollaborationCollaboration drop be defined as latest development in supply train caution which involves the process of working together with your suppliers, business partners or business enterprise in achieving a common goal that benefits all parties (McLaren, oral sex & Yuan, 2002). Ellinger, Daugherty & Keller (2000) spy what exactly links marketing and logistics within a come withs integration, as come up as measures of performance that are twain objective and subjective in nature. They strand and identified collaboration as a variable that usurpations a relationship in a progressive federal agency in that it increases sharing information and ideas and leads to partners functioning together.Information sharingMcLaren, Head & Yuan (2000) has identified information sharing as the exchange of alpha phoner information with your supply rais e up partner for purposes that would assist individually partner in the succeeding(a). McLaren et al. (2002) discusses how a partnership betwixt the buyer and seller can be beneficial for both parties where information sharing is of find out importance. Their findings were that, creating partnerships among buyers and sellers were beneficial for both parties and that the mastery of information sharing depends on the type and size of the company as well as which tool they used for information sharing.Joint relationship effortJoint relationship effort refers to the combined determination and drive that is put into collaboration amid buyers and sellers. Monczka, Petersen, Handfield & Ragatz (1998) argued for example that when task organisation is performed between buyers and sellers, the buyer can so form a perceptive trust in their partners abilities which will later form a solid trust in their relationship.Dedicated investmentsKnemeyer, Corsi & Murphy (2003) defined dedicated investments as particularresources and effectives that are transferred to another fellowship that is highly historic towards producing services and products. They tried to excavate that there are different levels of partnership development in logistics forethought by research done by previous researchers who support in any case done research on the existing topic and if there is in fact a difference between these levels. Their findings were that the more trust there is within the relationship, the more partners invest in the relationship which directly increases dedicated investment.Commitment and trustCommitment refers to buyers and sellers engaging themselves and maintaining a working relationship in a way that will benefit both their own organisation and the company they abide an association with. Trust refers to the reliance, surety, dominance or ability in a person or thing. In this case, it is having the reliance, surety, confidence or ability in the working relation ship of one or more organisations. Mohr and Spekman (1994) was the first to find that trust and commitment are of last importance in a buyer seller relationship, and that these factors lead to the success of the relationship.Satisfaction and PerformanceSatisfaction can be defined as referred to Mohr & Spekman (1994) as the completion of a task by which the involved society is pleased with the quality and degree of work carried out and it meets the precedent focalize by the partners. Performance on the other hand can be defined as the completion of a task by a degree higher than specifications set out by the individual involved. Mohr & Spekman (1994) argued that the buyer-seller relationship is a partnership which gene localises satisfaction when performance expectations gain been achieved. A study had been conducted and showed that commitment and co-ordination are unequivocally associated with satisfaction and an increase in gain would bring nearly satisfaction among those parties involved in the supply grasp3. Research HypothesesThe hypotheses are constructed with a purpose of assisting in answering the research question, which is seeks to find The Nature of buyer-Seller Relationships in the Retail Sector. Based on the reassessment of the relevant literature, our hypotheses are based on some of the important variables that exist in the supply set up relationships. The relationship variables focused on are commitment and trust, performance, satisfaction, vocalise relationship effort and collaboration, and will be shown using the relevant hypotheses. These relationships form the basis of the research propositions that will be well-tried in the eon of this study. H1 Commitment and trust has a substantiating trespass on collaboration. Since committed partners bring about an effort to achieve the goals of their business relationship, high levels of commitment are most likely to produce a good collabo countd relationship. H2 Performance has a affi rmatory impact on collaboration.The strength of collaboration in a supply chain relationship depends on the world-beater of the chain performance short-term (performance within one year), medium-term (performance over one to three geezerhood) and long-term (performance over two to five years). H3 Satisfaction has a positive(p) impact on collaboration.The extent to which the buyers and sellers in the supply chain relationship are satisfied, projects the strength of their relationship. Thus, when both parties are satisfied with the collaboration, their relationship will produce good results. H4 Joint relationship effort has a positive impact on collaboration. By engaging in a adjunction relationship effort that involves sharing resources and capabilities, buyers and sellers can achieve a profitable collaboration that they cannot create alone.4. Research MethodologyAn exploratory-descriptive study was conducted to keep this research report. The context selected for this study foc used on the clothing retail sector. The unit of digest in this study was the nature of buyer and sellerrelationship in the clothing retail sector. We focused on the buyers perceptions of the relationship as we were unable to collect data from both buyer and seller. Even though having data composed from both parties would induct been more beneficial, time and finances were a constraint and had to be taken into con inclineration therefore it resulted in focusing on one side of the relationship. Internet searches of various clothing companies were compiled. Each company was contacted by earphone so that we would be able to speak directly to a clothing buyer. They were notified beforehand as to the purpose of this study and that their participation would be implicit in(p) in completing this research report.The clothing buyer had the choice as to receiving the questionnaire via email or an inter visual modality. Most questionnaires were sent via email as buyers had other commitment s as well and preferred this form of communication. A sum of 500 questionnaires was sent to various companies within the clothing retail sector, of which, only 106 ( retort rate of 21%) results were received that was used for analysis. This solvent rate was lower than we had judge but we had to work with the data provided and confront the process as it was a busy period for most buyers at that time. The surveys were coded and hence uploaded on a spreadsheet as it was simpler to analyse the data and descriptive statistics had been implemented to construct the necessary graphs that would conclude the findings. The following chart was designed to illustrate the reply rate of the survey.Figure 1 Percentage of Responses Coded5. Data analysis and FindingsIn this member of the report there will be a detailed parole on the data collected in the survey as well as a representation of the findings. There will be a detailed analysis of the hypothesis tested and in addition an explanati on of how the findings were derived. To end up the report 500 surveys were distributed to companies across South Africa. Only 106 of the companies responded but there were a number of biases. With regards to the nature of the relationship with supplier 5 answerings didnt answer, under the classs joint relationship effort, dedicated investments and commitment andtrust there was 1 respondent who didnt answer the questions. Under the satisfaction ingredient 7 answers were left blank and 2 of the questions were answered with incorrectly. Under the performance section 8 answers were left blank.The following table was designed to displaying the mean, median, mode and range. down the stairs is the table 1 showing all the data.MEANMEDIAN modeRANGE1.NO. YEARS AT COMPANY8.73809575382.NO. YEARS IN CURRENT POSITION6.62948241373.NO. YEARS WITH SUPPLIER12.016101060Table 1 Mean, median, mode, range, standard deviationThe first path in the table 1 in a higher place illustrates the number o f years the respondent has been with the company. This information shows that the average amount of years a respondent has been with the company is 8.738095 years, the middle stalk response was 7 years, the most denounce response was 5 years and the difference between the respondent who has been with the company the least amount of years and most amount of years is 38 years. Since the respondents mother a number of years with the company it means that they are acquainted(predicate) with the companys way of business, how they deal with suppliers, who all the suppliers are and also the type of relationship they consume with the suppliers.The second row illustrates the number of years the respondents have been in the company. It shows that the average amount of years a respondent has been with the company is 6.629482 years, the middle frequent response was 4 years, the most frequent response was 1 year and the difference between the respondent who has been with the company the lea st amount of years and most amount of years is 37 years. The high number of years that some of the respondents have been in their present-day(prenominal) positions gives an indication the information given is reliable and that it will aid in answering the question at hand.The third row depicts the number of years the company has spent with the supplier. It shows that the average amount of years a respondent has been with the company is 12.016 years, the middle frequent response was 10 years, the most frequent response was 10 years and the difference between the respondent who has been with the company the least amount of years and most amount of years is 60 years. The high number of years with same supplier shows that the information collected depicts a mature relationship between the buyer and the seller. Seeing that the relationship is matured the main focus of both the buyer and the seller would then be to continue to build on the relationship so that they can be in business for even more years tocome.The following chart illustrates the position of the respondents which in turn goes with the number of years the respondents have been in their current position. It shows that 5% are CEOs, 1% murmurs, 7% directors, 10% gross revenue managers or supervisors, 12% other employees and 48% buyers. The fact that such a high number of the respondents are buyers displays that the questions answered are quite accurate since they have a good understanding of the relationship with the supplier. The buyers dress hat understand the relationship with the supplier and since the study at hand is feel at the collaboration of buyers and sellers, the information gathered will have a great impact in answering the given hypothesis. Figure 2 Current positionCommitment and TrustFigure 3 point of respondents to questions about commitment and trustDescriptionThe above data represents responses pertaining to questions about commitment and trust amongst buyers and their suppliers in supply chain relationships in the clothing sector. The graph illustrates whether the buyers agree or dissent to the extent of commitment they have with their suppliers. The x-axis of the graph represents the outmatchs between powerfully resist and strongly agree. Meanwhile, the y-axis of the graph represents the response scores of the buyers. abridgmentWhen assessing the data, it is evident that seven hundred and forty one (741) responses were obtained in the commitment and trust section of the questionnaire. Taking a approximate look at the responses, it is evident that 4% of the respondents strongly disagree that commitment and trust have a positive impact on collaboration. Meanwhile, 6% of the respondents have a indifferent(p) opinion, and 90% of the respondents strongly agree to the questions.The low 4% might have been supported by the fact that their companies are in business on a short-term basis. Thus, they do not foresee the business relationship continuing for a long time, precise little investment has been injected to their relationship, thus commitment is very low. The slowly wage hike 6% response rate could have been due to the fact that buyers are not certain where their loyalties lie with that certain supplier. Another factor could be because they are s work in early business with the supplier, so the suppliers commitment and trust to the buyers company have not reached maximum levels yet. The very high response rate of 90% can be influenced by various factors.The supplier is genuinely bear on that the buyers company succeeds buyers expect the business relationship to continue for a long time the buyers are committed to their supplier effort and investment have been made to build their relationship they expect the relationships to modify over time, etc. These factors prove that these buyers support the hypotheses stated, that commitment and trust have a positive impact on collaboration. Therefore, this data proves Mohr and Spekman (199 4) correct when they found that trust and commitment are of utmost importance in a buyer seller relationship, and that these factors lead to the success of the relationship.PerformanceFigure 4 Degree of respondents to questions about performanceDescriptionThe graph depicts the responses of clothing buyers to cardinal questions relating to performance creation a factor of a successful collaboration among buyer and seller relationships. The horizontal axis(x axis) illustrates the Likert racing shell from 1 7 which ranges from strongly disagree to strongly agree. The vertical axis(y axis) depicts the score, which is the cumulative responses received from the clothing buyers. The above graphical representation shows the movements of responses to a set of questions aimed at performance and fair(a) by glancing at the graph one can already set that most respondents (about 74%) strongly agree that performance has a positive impact on collaboration. AnalysisWhen assessing the data i t can be seen that four hundred sixteen (416) responses were received that answered this section of the questionnaire. However on a scale of 1 3, 12% respondents strongly disagreed with the notion of performance enhances collaboration, 14%(scale 4) were neutral and 74 %( scale 5 7) strongly agreed on most of the questions that had been asked. The reasons that may have led to a 12% response rate could be that the buyers never had one focal supplier or were not in a long business relationship to determine if the relationship affected the businesss overall performance.Furthermore, the 74% response rate may have led to buyers agreeing with H2 performance has a positive impact on collaboration, as their relationship with the seller may have contributed to the increased performance of the overall relationship and company. Other factors contributing to the 74% response rate might have been that the relationship, reduced cycle times, improve order processing accuracy as well as prompt delivery of goods, this in turn increased the accuracy of forecasts that may have been conducted. According to Ellinger, Daugherty &Keller (2000) performance may be conceptualized as the extent to which the truehearteds goals are achieved, and as illustrated in the above graph the portion of respondents that strongly agreed already indicates that performance aids in positive collaboration which in turn would allow firms goals to be met effectively.Joint Relationship EffortFigure 5 Degree of Respondents to questions about joint relationship effortDescriptionThe above bar graph describes the number of respondents (clothing buyers) that disagree or agree that joint relationship plays an important factor in the buyer and seller relationship in the clothing sector. Respondents had to choose between a scale of 1 till 7 by which 1 stipulates strongly disagree and 7 refers to strongly agree. Thereafter the data was grouped together harmonise to the number of individuals that did choose between the scales of1 till 7. Respondents were asked three questions relating to joint relationship effort. These were as follows , whether the firm and supplier has 1) joint teams 2) conduct joint planning to anticipate and resolve operational problems and whether they make 3) joint decisions about improving overall cost efficiency. When looking at the results, one can see that 49 respondents had a neutral view regarding joint relationship and 74 of the respondents strongly agrees that joint relationship plays an important role in the buyer and seller relationship.AnalysisWhen assessing the data it can be seen that 307 responses were received that answered this section of the questionnaire. However on a scale of 1-3, 25% respondents strongly disagreed with the notion of joint relationship that enhances collaboration, 16% (scale 4) were neutral and 62% (scale 5-7) strongly agrees on most of the questions that had been asked. The reason that has led to a 25% response rate can be du e to buyers and suppliers does not have joint teams and thus do not plan together as a team. Therefore they do not know the benefits of having joint teams.Therefore this data show case a broad view regarding joint relationship effort as being an important variable as the graph has an upward trend. Furthermore, the response rate of 62% may have led to buyers agreeing with H4 joint relationship effort has a positive impact on collaboration, as their effort and commitment in creating joint teams and planning together might have improved collaboration between buyer and supplier.SatisfactionFigure 6 Responses to Satisfaction in the tog IndustryDescriptionThe above graph describes the number of respondents (clothing buyers) that disagree or agree that satisfaction plays an important factor in the buyer and supplier relationship in the clothing sector. Respondents had to choosebetween a scale of 1 till 7 by which 1 stipulates strongly disagree and 7 refers to strongly agree. Thereafter th e data was grouped together according to the number of individuals that did choose between the scales of 1 till 7. Respondents were asked eight (8) questions relating to satisfaction.The questions were as followed whether the buyer was satisfied with the relationship in terms of 1) coordination of activities 2) participation in decision making, 3) level of commitment 4) level of information sharing 5) management of activities 6) profitability 7) market share and 8) sales growth. When looking at the results, one can see that 153 respondents had a neutral view regarding satisfaction and 448 of the respondents strongly agrees that satisfaction plays an important role in the buyer and supplier relationship.AnalysisWhen assessing the data it can be seen that 1508 responses were received that answered this section of the questionnaire. However on a scale of 1-3, 6% respondents strongly disagreed with the notion of satisfaction enhances collaboration, 10% (scale 4) were neutral and 84% (sc ale 5-7) strongly agrees on most of the questions that had been asked. The reason that led to a 6% response rate can be due to buyers and suppliers having a young business relationship and thus not stint satisfaction levels as yet. When looking at the data, the response rate of 84% may have led buyers agreeing with H3 satisfaction has a positive impact on collaboration.This can be due to respondents identifying market share and sales growth as being two of the most important factors being satisfied by the supplier. This relates to a study done by Mohr & Spekman (1994) as they identified the completion of a task by which the involved party is pleased with the quality and degree of work carried out and it meets the standard set by the partners, market share and sales growth being the standard set by the buyer.6. ConclusionAs mentioned above the problem being researched was the knowledge gap between buyers and sellers place of the nature of the supply chain relationship. The research study conducted on the nature of buyer-sellerrelationship in the clothing industry was a lengthy procedure that involved plentiful of consultations and analysis of the data obtained. However, we have concluded that our data findings have committed to the hypotheses mentioned in the research report. As previously mentioned time and finances were major constraints for the duration of the study hence the weak response rate of 21%.Some of the other constraints were the buyers having their own responsibilities because of the short time frame given in which to complete the survey. In addition, 50% of the buyers were reluctant to answer some of the questions as they contained confidential company information. Furthermore, the report only focused on the buyers perspective of the relationship. 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