Case: Brewing Peace Philippines: Customer

Relationship Management

Case Synopsis: Brewing Peace was an

integrated coffee manufacturing and selling

company in the Philippines. It targeted sales

revenue of P2 billion by end of 2022. Despite a

base of 80 customers, 70% of its business

depended on 9 key accounts, including its

largest buyer CEL, which accounted for 20% of

Brewing Peace's revenue. The co-founder Jose

realized that a 55.6% rise in operating costs had

resulted in only a 29.8% profitability growth. This seemed to be compounded by CEL's new order of P30 million, which had a profit margin of less than 20%, a 90day payment period, and a short delivery time. This forced Jose to review his relationship with his biggest client. Jose's

dilemma was he could not accept this order on

CEL's terms without jeopardizing his company's

payment terms with its vendors and affecting the supply of its orders worth P25 million to its other customers. He wanted to retain business with CEL yet nurture and augment his relationship with other clients. In such a case, Jose wanted to have clarity about whether to accept the order on CEL's terms or renegotiate the price, payment terms, and delivery schedule to benefit his own company.

Discussion Question:

What should Brewing Peace do about its recent order from CEL? You may consider 'Maintain Status Quo", Renegotiate Order and Payment Terms' or 'Stop Supplying Products to CCEL' as options.