Framework for Evaluating Supplier Relationships PPT

This PPT slide, part of the 72-slide Best Practices in Negotiations Strategy PowerPoint presentation, presents the Supplier Perception Model, which categorizes supplier relationships based on their strategic importance and growth potential. It is structured in a matrix format with 2 axes: the vertical axis represents the strategic significance of the account, while the horizontal axis indicates the growth potential.

The model is divided into 4 quadrants: Develop Account, Core Account, Nuisance Account, and Exploit Account. Each quadrant outlines the characteristics and approaches to managing relationships within those categories.

Develop Accounts are seen as strategic with good growth potential. The approach here is flexible, with a willingness to take risks and invest in the future, even if it means reducing margins to gain business. This reflects a proactive strategy aimed at nurturing long-term relationships.

Core Accounts are critical for turnover and potential growth. The approach remains flexible, focusing on special terms to retain and grow these accounts. There is a readiness to trade margin for volume, emphasizing the importance of maintaining these relationships for ongoing business success.

Nuisance Accounts are viewed as insignificant with limited growth opportunities. The approach tends to be inflexible, often leading to minimized costs and poor customer service. Companies may even consider dropping these accounts altogether, indicating a lack of investment in these relationships.

Exploit Accounts are characterized as declining with little opportunity for development. The approach is inflexible, focusing on maximizing profit margins while the business is still active. This reflects a more transactional mindset, as there is little incentive to invest in these relationships.

Overall, the model provides a framework for understanding and managing supplier relationships based on their perceived value and growth potential.

This slide is part of the Best Practices in Negotiations Strategy PowerPoint presentation.

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