Question

Zimway is a small manufacturer of linen. Couture Smart, a big apparel brand buys linen from Zimway in large quantities. Zimway, otherwise, has very few clients and most of them buy linen occasionally and in minimal quantities. Therefore, Couture Smart is crucial for Zimway's survival and success. Which of the following concepts is illustrated in the scenario?

a. Buyer dependency
b. Supplier dependency
c. Anti-competitiveness
d. Opportunism

Answer 1

Answer: Buyer dependency

Explanation: Buyer dependency refers to the situation when the supplier of a commodity is heavily dependent on one or two buyers for operating effectively in the market. This situation is common to those organisations that do business to business sales operations.

In the given case, Zimway made a majority of sales to couture and the other buyers purchase from it in small quantities.

Hence, from the above we can conclude that this case illustrates Buyer dependency.