A firm is likely to develop collaborative relationships with suppliers to help minimise supplier and inventory-related costs when the strategic focus of the firm is:

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When a firm has a cost leadership strategy, it is focused on reducing costs as much as possible in order to offer lower prices than its competitors. Developing collaborative relationships with suppliers helps to minimize both supplier and inventory-related costs, which supports this strategy. By working closely with suppliers to negotiate lower costs for raw materials or components and by having a reliable supply chain, the firm can reduce its overall costs and maintain a competitive advantage through lower prices.

A Firm Is Likely to Develop Collaborative Relationships with Suppliers