Consider that in the case of wal-mart, the buyer has a higher position of power than the supplier (Yilmaz Borekci et al., 2015). This is believed to be a large number of wal-mart orders to major suppliers. This flood of orders accounts for more than 90 per cent of the supplier organisation’s revenues by delivering products to wal-mart itself. This provides more benefits for the management of the organization. Wal-mart’s management can influence suppliers, reduce product costs, further provide high-quality products and deliver more functions in a timely manner. However, when the supplier’s position of power is higher than that of the buyer, it can affect the buyer’s acceptance of lower quality, increased price, and lack of availability that negatively affects the organization (Buciuni and Mola, 2014). Therefore, a balance in the position of power is necessary and a strategic partnership is formed to maximize the benefits.
In addition, the power of the buyer’s supplier provides the supplier with the necessary confidence that the buyer will purchase supplies from a specialized source, thereby generating additional revenue for the supplier. Because of this advantage, suppliers offer discounts on material prices to encourage long-term associations and future purchases (Chicksand, 2015). Product-related benefits derived from the power and exchange results of the buyer’s supplier, as well as contributions to the overall organization in terms of technology, product development, cost reduction, and timely delivery.