Suppliers; Stakeholder of Asda and Kellogg's

What is meant by a supplier?

A supplier is usually a large business that manufactures materials into good which can then be sold onto stores such as Asda. Suppliers are important to a business because, without them, the business would not have any products to sell to the general public, meaning they will not generate any profits. However, suppliers rely on businesses to buy their products, meaning it is a two way relationship.

Businesses rely greatly on suppliers as they help their businesses run efficiently by providing goods on time, this is important as suppliers could lose custom if they weren’t punctual enough towards their buyers.

Examples of common suppliers are; Kellogg’s – they are a snack based company which manufacture and sell on food such as cereals and snack bars.

Also, Walkers is another common supplier who are a snack based company which modify raw materials into crisps, which are then sold onto supermarket stores.

Internal or External?

Suppliers are external stakeholders because they do not work directly within a business, they are an organisation or small company which has an interest in another business and they’re also affected by the activities of that business.

For example, a supplier of Asda is Kellogg’s they provide them with snack based foods which can then be sold in their stores across the UK.

Suppliers of Asda

Asda have a supplier’s website where they allow the general public to know what they expect to gain from having a relationship with a supplier. www.asdasupplier.com

This is taken directly off the website: These are the things Asda expect off suppliers.

In order for our business to work, we need a healthy relationship with our supplier base. The way we want to work with you is set out below.

We break our business down into four key supplier facing areas:

Food, Household, Health & Beauty - this area covers off the key FMCG core of our business.

H&L - Home & Leisure offers a breadth of non-food range that few of our competitors can equal, and contributes to our vision of delivering “everything under one roof”

Clothing - Our George clothing business is one of the largest clothing retailers in the UK by volume, and has a trusted heritage stretching back almost 20 years.

Central Buying - This is the team who makes purchasing decisions on goods not for resale (GNFR) – from capital expenditure on contracts for building, through to carrier bags and colleague uniforms.

Kellogg’s suppliers

Delivering Success

“To keep our company and communities growing strong, we source from the widest and the best base of suppliers. It’s all part of our Supplier Diversity Program.

By strengthening our diverse procurement relationships with W/MBE-owned, -controlled and -operated businesses, we can help each other achieve long-term success. So together we can all keep going — above, beyond.”

This is what Kellogg’s believe when it comes to the supplier’s diversity aspect of their business. It has been taken directly off their website.

http://www.kelloggcompany.com/en_US/supplier-diversity.html

Kellogg’s suppliers provide them with the raw ingredients and packaging to make their products which can then be sold onto the tertiary sector business, such as Asda.

What do suppliers hope to gain from Asda and Kellogg’s?

Business growth – This is one of the main interests that Suppliers have for a business, this is because if the business keep on growing and developing, then they are more likely to want or need a larger volume of products from their suppliers, this means that suppliers will be generating a higher profit.

Loyalty – Suppliers have to develop a good relationship between Asda and Kellogg’s in order to keep them as loyal customers, this means that they voluntarily want to come back to their suppliers for repeat custom. This also means that the suppliers will be continuously maintaining their profit levels as they haven’t lost any business.

Suppliers also want to be heard by their customers, this is because suppliers are always thinking of new ways to develop and improve their products which then have to be sold onto stores such as Asda or Kellogg’s, this can either be a good or bad thing as some customers may or may not like the changes to the products.

An example of this is, Kellogg’s developing different models to their cereals. Such as Coco Pops being changed in to different shapes such as Moons and Stars.

How do suppliers influence the aims of Asda and Kellogg’s?

Suppliers have a huge influence on Asda and Kellogg’s as they are the reason for why customers return to their business to buy more products.

Quality – Suppliers influence the aims of Asda and Kellogg’s in terms of quality, this is because one of their main aims is to provide their customers with the best quality products. Now, this is all down to the suppliers as they are the people who provide the products which have to be sold to the general public. If the products aren’t of their highest quality, then customers will become dis-satisfied and highly unlikely to return back to buy more, this will affect profits in a negative way as there will be fewer customers.

An example of this could be Kellogg’s providing Asda with cereal bars which weren’t produced properly as customers were coming back to complain that they were too hard to eat.

Below is an article which shows a real example of when one of Kellogg’s products lacked quality. http://www.newsoxy.com/health/kelloggs-cereal-recall-27-90600.html

Reliability – The reliability could affect production. If orders do not arrive on time finished goods may not be ready for shipping to customers. Also, it would affect the likelihood of the repeat custom as Asda and Kellogg’s want to run an efficient business and suppliers are a big part of efficiency. This would affect both suppliers and the two businesses profits as they will be losing customer and wasting time finding new suppliers.

Credit Terms – Suppliers could change the way that they operate financially which means that Asda and Kellogg’s could be affected as they may have to pay higher prices than what they usually do for bulk orders.

Pricing – Good pricing is vital for both the suppliers and two businesses as they both want to generate profits at the end. If the suppliers pricing is too high then they aren’t likely to have much custom, also, if Asda’s pricing is too high then they aren’t likely to have customers as they would go elsewhere. This is where both the suppliers and two businesses have to stay on top of their competitors in order to make profits and maintain customers.

How the supplier’s interests conflict with other stakeholders of Asda and Kellogg’s?

Example 1 – (Suppliers and Customers) Customers are always looking for cheaper priced good, this means that the suppliers would have to lower their prices, however, they cannot afford to do this, which means that the customers would be dis-satisfied and possibly go elsewhere to find cheaper products. This will affect both businesses and the suppliers as they will lose out on profit.