Vendors Capability: A Way for Winning the Contract in a B2B Relationship

Abstract

A Business-to-Business commercial (B2B) transaction is different from normal retail transactions with customers. Organisations engage with each other and vendors in a specific manner in a B2B purchase environment. Organisations, big or small, spend money to keep up with their business operations. This requires them to deal with many other business units called vendors/suppliers to help them with necessary input resources for their business operations. In B2B transactions, organisations deal with each other to purchase goods and services. These associations work on long-term business relationships. The vendor organisations hire sales teams and relationship managers to work with the client organisation in order to maintain healthy business relationships. It is a point of debate whether the relationship that exists between the vendor and the client is because of the personnel who is responsible for the relationship or is it the vendor organisation as a whole that has built its capability and experience over the years has been successful in maintaining business relationships with the client. A client who engages with a vendor will have certain criteria for selection and engagement with a vendor. With this view, we have decided to study this phenomenon by comparing the two factors – sales person’s relationship and vendor’s capability and check which of the two factors influences the awarding of contracts from the clients. Purchase is more process driven it evaluates the vendors strongly on their capability to deliver on the purchase terms. The data analysis and the hypothesis testing results obtained indicate that evaluating vendors by their capabilities for awarding contracts is a more pragmatic way of supplier selection.

DOI: https://doi.org/10.21863/jcar/2024.13.1.002

Keywords: Vendor Management, B2B Sales, Relationship Management, Corporate Purchase Decisions

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