Business relationship

What types of business relationship are there?

The term business relationship refers to an interaction between economically independent decision-makers (e.g. a private household or a company), which is designed for the long term and is oriented towards economic goals. A relationship of this type is the basis for business transactions. There are different types of parties that can be involved here:

  • Private individuals (customers)
  • Organizations or authorities (administration)
  • Companies (business)

Thus, there are different types of business relationships, depending on which parties are involved.

What is B2A?

The abbreviation B2A stands for „Business to Administration“. It refers to a business relationship between a private company and a public authority. Generally, this type of business relationship is designed for a longer period of time and a high order volume. It often makes it possible to process applications more quickly, which is why it is very desirable for companies. The relationship between a company and the tax office is a good example for a B2A business relationship.

What is B2B?

„Business to Business“ means business relationships between two or more companies. This includes all processes and contacts between companies that do not affect the customer. An example of a B2B relationship would be a trading company that does not sell its products directly to private consumers but to another company such as a wholesaler. The term B2B is often used in connection with marketing. Marketing that refers to a business relationship with another company is known as B2B marketing.

What is B2C?

B2C stands for „Business to Customer“ and describes the business relationship and communication between a company and the end-consumer. This includes, above all, targeted marketing measures and a target group approach. Usually this type of business relationship is of a rather short duration and involves a small order volume, such as the one-time purchase of a private person in an online shop.

What is C2C?

Not only companies can enter into business relations with each other. Of course, private individuals can do so, as well. Such business relationships are then referred to as „Customer to Customer“. A good example of this are auction platforms on which private individuals sell to other private individuals.

What is A2A?

Authorities can also enter into business relations with each other. This happens, for example, when one authority needs access to the data of another authority.

What is A2C?

Private individuals and public authorities can also enter into business relationships. An administration-to-customer relationship occurs, for example, when a private individual submits his tax return to the tax office or registers his or her new car with the vehicle registration office.

How is a business relationship structured?

The authors Dwyer, Schurr and Oh developed a four-phase model of business relations in the 1980s. According to this model, a business relationship usually goes through the phases of perception, exploration, expansion and commitment

Phase 1: Awareness

No interaction between the business partners takes place here. One or both sides realize that communication or cooperation with the other side can be an advantage for them or that the other side is an option for them as a business partner.

Phase 2: Exploration

The following phase is all about searching and trying out. In the course of this phase, the two sides are slowly converging. In the case of a B2C relationship, this can be, for example, a trial purchase or the use of a free trial version of the product offered.

Phase 3: Expansion

If both business partners are satisfied with the course of the first two phases, they can build on this and expand their business relationship. Their aim is, of course, to increase mutual benefit.

Phase 4: Commitment

With the fourth phase, a business relationship reaches its highest level of development. The business partners are satisfied with the cooperation and less open to entering into other business relationships.