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Some distributors continuously search out new suppliers to find better pricing and margins for their firm; whereas others believe they will add value to their firm by developing a more integrative relationship with certain key suppliers. The graph below shows the results of a comprehensive study where the integrative relational approach to treating suppliers significantly increases key performance metrics as compared to when the relationship is more transactional (i.e., less integrative) in nature.

Select one of the outcomes (e.g., supplier quality or sales growth) and explain why the integrative approach between the supplier and distributor produces such significant differences in performance relative to the transactional approach. In doing so, use the information discussed in the Module and Chapter 3, and identify specific behaviors the suppliers and distributors would demonstrate that describe examples of an integrative approach. (This study is NOT about behaviors with customers/consumers).

Fig: 1