Determinants of long-term buyer-seller relationships : an analysis from a buying office's perspective in Hong Kong apparel industry

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Determinants of long-term buyer-seller relationships : an analysis from a buying office's perspective in Hong Kong apparel industry

 

Author: Siu, Lai-kam
Title: Determinants of long-term buyer-seller relationships : an analysis from a buying office's perspective in Hong Kong apparel industry
Degree: M.A.
Year: 1999
Subject: Clothing trade -- China -- Hong Kong
Industrial procurement -- China -- Hong Kong -- Management
Negotiation in business -- China -- Hong Kong
Hong Kong Polytechnic University -- Dissertations
Department: Multi-disciplinary Studies
Institute of Textiles and Clothing
Pages: ix, 82 leaves : ill. ; 30 cm
Language: English
InnoPac Record: http://library.polyu.edu.hk/record=b1483459
URI: http://theses.lib.polyu.edu.hk/handle/200/2909
Abstract: Traditional arms-length buyer-seller relationship often does not provide effective coordination of marketing activities while vertically integrated organization may be too costly and inflexible to operate. When co-operation allows a combination of growth and cost reductions that are too attractive to ignore, a long-term buyer-seller relationship stands out as a better alternative to implement. Therefore, this study investigated the determinants of a long-term buyer-seller relationship. There were four objectives in this study: (1) explore the rationale behind developing long-term relationship, (2) examine the impacts of long-term orientation on buyer-seller relationship, (3) identify the determinants of long-term relationship, and (4) examine how the long-term relationship can be sustained. These were accomplished by literature reviews and an industrial survey. Findings from previous researches indicated that co-operative long-term relationship was based on factors like resources dependence, lower costs, needed skills and knowledge and increased profitability. And the impacts of such relationship were buyers using fewer suppliers, increasing dependent on suppliers and evaluating suppliers carefully. It was proposed that long-term orientation was a function of three main factors: (1) buyer's dependence, (2) trust on supplier, and (3) satisfaction of supplier's past performance. Dependence and trust were related to transaction specific investments, reputation and satisfaction. The framework presented was tested from a buyer's perspective. Data were collected from a survey of thirty ladies' apparel buying offices in Hong Kong about their relationship with the key suppliers. The result indicated that dependence, trust and satisfaction were able to explain 45% of the variance in buyer's long-term orientation. After analyzing findings of the survey, conclusions were drawn and managerial implications were highlighted. It is beneficial for suppliers to know buyers' relationship orientation and their expectations in order to formulate appropriate strategies accordingly. For suppliers aim at developing and sustaining long-term relationships with their buyers, it can be achieved through trust-enhancing actions, supplier's transaction specific investment and reliable performance.

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