Asymmetric customer–supplier relationship development in Taiwanese electronics firms

The purpose of this paper is to analyse the relationship development stages of asymmetric customer–supplier relationships. The structure of relationships between larger customers and smaller suppliers has been the focus of a number of studies in IMP (Industrial Marketing and Purchasing Group) research. But, there is a paucity of research that examines development stages in relationships where a difference in size between the parties exists. The paper links the characteristics of asymmetric customer–supplier relationships and the relationship development stages through a literature review. The findings from a set of five in-depth case studies of asymmetric customer–supplier relationships in the Taiwanese electronics industry are presented. The case studies involved 50 semi-structured interviews with customer and supplier executives and, in addition, multiple observations of customer–supplier interactions within each case study. Individual and cross-case analysis was conducted to examine the links between the characteristics of asymmetric customer–supplier relationships and relationship development stages. The findings revealed that asymmetric customer–supplier relationships in the Taiwanese electronics industry were very unbalanced and vulnerable in the exploratory stage of development. In the developing stage relationships were more likely to develop if suppliers and customers mirrored each other's behaviour and echoed each other's priorities. In the stable stage suppliers and customers worked on shared and balanced contributions to the relationship. The paper contributes to the understanding of how smaller suppliers and larger customers can identify and develop key sets of relationship characteristics through the exploratory, developing and stable stages of asymmetric relationship development from both customer and supplier perspectives.     

Interaction capability development of smaller suppliers in relationships with larger customers

The purpose of this paper is to examine the interaction capabilities developed by smaller suppliers in relationships with larger customers. The contribution of the paper is the development and application of an interaction capability framework to evaluate the types of interaction capabilities developed by smaller suppliers that enable them to cope and better manage in relationships with larger customers. The paper reports on eight in-depth case studies comprising forty-eight interviews with smaller UK textile suppliers in relationships with larger customers. The findings identify the features of the smaller suppliers' interaction capability set comprising four elements: human interaction, technological interaction, managerial systems interaction and cultural interaction capability. The paper concludes by evaluating the lessons from the application of the interaction capability framework and highlighting how smaller suppliers can focus on the development of their interaction capability set to gain positioning advantages in their relationships with larger customers and offer superior customer value.     

Knowing me,knowing you: Self- and collective interests in goal development in asymmetric relationships

This paper investigates how self-interests and collective interests in goal development are manifested in the context of asymmetric customer–supplier relationships. Taking an interaction approach (IMP Group, 1982), a conceptual structure highlighting possible patterns of characteristics of the asymmetric customer–supplier relationship and approaches to self- and/or collective interests in goal development has been created.Based on a multiple case study approach, the findings suggest that smaller suppliers who deliberately pursue self-interest in their business activities with larger customers experience better outcomes. Larger customers recognise that the creation of collective business goals enhances the outcome of joint efforts in terms of market impact and profitability. The findings also highlight that trust is perceived as a necessity for the development of collective interests in asymmetric relationships and that the power of the larger customer is not perceived as a constraint. A key conceptual contribution is the identification of two distinct types of asymmetric relationships: ‘product/technology-oriented’ in which self-interest dominates by focusing on one party's resources for developing new products or technology and ‘complementary competencies-oriented’ in which collective interests link the competencies of the larger and smaller party for new joint business ambitions.     

Effects of Supplier and Customer Integration on Product Innovation and Performance: Empirical Evidence in Hong Kong Manufacturers

While the beneficial impacts of supplier and customer integration are generally acknowledged, very few empirical research studies have examined how an organization can achieve better product performance through product innovation enhanced by such integration. This paper thus examines the impact of key supplier and customer integration processes (i.e., information sharing and product codevelopment with supplier and customer, respectively) on product innovation as well as their impact on product performance. It contributes to existing literature by asking how such integration activities affect product innovation and performance in both direct and indirect ways. After surveying 251 manufacturers in Hong Kong, this study tested the relationships among information sharing, product codevelopment, product innovativeness, and performance with three control variables (i.e., company size, type of industry, and market certainty). Structural equation modeling with correlation and t‐tests was used to test the hypothesized research model. The findings indicate a direct, positive relationship between supplier and customer integration and product performance. In particular, this study verifies that sharing information with suppliers and product codevelopment with customers directly improves product performance. In addition, this study empirically examines the indirect effects of supplier and customer integration processes on product performance, mediated by innovation. This has seldom been attempted in previous research. The empirical findings show that product codevelopment with suppliers improves performance, mediated by innovation. However, the sampled firms cannot improve their product innovation by sharing information with their current customers and suppliers as well as codeveloping new products with the customers. If the adoption of supplier and customer integration is not cost free, the findings of this study may suggest firms work on particular supplier and customer integration processes (i.e., product codevelopment with suppliers) to improve their product innovation. The study also suggests that companies codevelop new products only with new customers and lead users instead of current ones for product innovation. For managers, this study has demonstrated that both information sharing and product codevelopment affect performance directly and indirectly. Managers should put more emphasis on these key processes, especially when linked with product innovation. Managers should consider involving their suppliers and customers in the early stages of design. Information sharing with suppliers is also important in product development. As suggested by this study, extensive effort on supplier and customer integration should be made to directly augment current product performance and product innovation at the same time.     

Development and implementation of customer solutions: A study of process dynamics and market shaping

A broad, dynamic network perspective on solution processes remains scarce. This article presents the process of developing and implementing customer solutions and its effects on the wider business environment by investigating customers and suppliers in the global mining industry (Australia, Chile, and Sweden), analyzing the deployment of a new customer solution, and assessing the changes to the competitive environment and focal firms' relationships with other customers and suppliers. It shows that the forces that drive customer and supplier interests and motivation to co-develop customer solutions may change over time, thus redefining the aim and scope of solutions and creating failure risks. Customers present problems; suppliers respond, on the basis of not only the feasibility of the customer-specific solution but also of their evaluation of future solutions in a broader market; then suppliers aim to standardize successful solutions across markets. Customers want close supplier relationships and unique solutions but also like standardized and repeatable solutions, so they can share development costs with competitors and expose the supplier to competition to avoid lock-in effects. From a network perspective, a novel solution can have a market-shaping effect and evoke reactions from other actors who want to enhance their market position. However, these changes are not necessarily deliberate, and the dynamics that market introductions of solutions trigger may be difficult to predict.     

Supplier adaptation: A qualitative investigation of customer and supplier perspectives

Differing views and goals in the buyer–supplier dyad can create underlying tension in supply chain relationships. Although research recognizes that adaptation is often expected from both customers and suppliers in exchange relationships, researchers have not adequately explored the long-range relational implications of customer adaptation requests. This research uses data from two qualitative focus groups to examine the interaction of customers and suppliers surrounding adaptation, as prior research has not yet considered how the customer's response to adaptation may change if they are aware of how the supplier actually perceives and evaluates specific adaptation requests. The first focus group included 20 active participants representing both customer and supplier perspectives, while the second focus group included five participants to provide a more in-depth examination of issues that emerged in the first focus group. Results suggest that customers' and suppliers' adaptation expectations differ; each has difficulty recognizing adaptation conflict because of perceived benefits and biases surrounding adaptation. Results suggest several adaptation conflict management behaviors are utilized to minimize its negative impacts on supply chain relationships, including blameshifting, justifying and negotiating techniques. Results suggest that trust can create blind spots in relationships, potentially causing customers and their suppliers to have difficulty recognizing conflict until it deteriorates relationships' foundational trust.     

Customer approaches to product development with suppliers

It has long been accepted that a realistic view of what happens between customer companies and their suppliers cannot be achieved by examining single purchases alone. Instead, a single purchase can only be understood as part of a supplier-customer relationship which both affects and is affected by it. Also in business markets, a customer's purchase behaviour is not simply a passive response to the marketing actions of a supplier, but part of the interaction between an active customer and supplier. A major element in this interaction is likely to arise from the efforts of the customer to develop its own products interactively with a network of suppliers. This paper reports on a study into the ways in which customers employ the skills of their network of suppliers and attempt to direct that network in product development projects. The paper suggests that customers are likely to use either of two alternative strategies for product development, that we term “network delegation” and “network intervention”. The paper draws on four in-depth case studies to highlight the types of situation where customers are most likely to employ each of these strategies and draws conclusions for marketers about the implications of each approach.     

The use of asset specific investments to increase customer dependence: A study of OEM suppliers

Making asset specific investments without sufficient economic safeguards is usually seen as a poor managerial practice according to transaction cost economics. However, in practice, many suppliers still invest in asset specificity to satisfy their major customers' requirements, who do not make sufficient investment commitments. The objective of this study is to explore how suppliers that make asset-specific investments maintain long-term relationships with their customers and even make their customers reliant on them. Empirical analysis of data from a sample of Taiwanese original equipment manufacturer (OEM) suppliers shows a significant positive indirect effect of asset specificity on the dependence of customers on suppliers, mediated through joint learning capacity. In addition, a positive link between a proactive market orientation and the degree of customer dependence on the supplier was found. This investigation finds evidence that joint learning capacity and proactive market orientation play critical roles in linking asset specificity to customer dependence.     

What drives customer Re-engagement? The foundational role of the sales-service interplay in episodic value co-creation

As existing business-to-business value co-creation (VCC) contracts approach their planned expiration, customers evaluate incumbent suppliers when forming their decisions to re-engage or defect. During this late stage of VCC, supplier sales and service personnel perform unique activities to support one another and foster VCC re-engagement. To investigate this sales-service interplay, the authors employ an exploratory inquiry consisting of 115 depth interviews across 63 customer accounts. Interviews were conducted with customers following the decision to re-engage or defect from an incumbent supplier. Findings suggest that sales' efforts to renew the VCC contract depend on tactical insights provided by service. Through their involvement with customers, service holds a tactical perspective that can extract micro-level customer insights. Findings also suggest that service's ability to influence supplier-specific knowledge stores within the customer organization depends on macro-level strategic customer directives that may be shared by sales. Further, service's activation of such knowledge stores moderates the relationship between sales' RFP response and the customer's VCC re-engagement decision. The results have implications for the industrial sales and service fields, since the integration of the sales and service teams is critical for garnering intrafirm knowledge flows that drive recurrent VCC within collaborative customer-supplier relationships.     

Relational key account management: Building key account management effectiveness through structural reformations and relationship management skills

Literature has widely recognised the importance of key account management (KAM) in building long-term customer relationships. Although KAM grounds significantly on the relationship marketing theory, most empirical studies focus on the financial impact a KAM programme can produce. Hence, only normative work can advise practitioners on the implications from adopting a relational approach in managing their business with customers who can help the supplier realise a broader set of strategic objectives. Drawing from 304 cases of different suppliers, this article seeks to start filling this gap in the literature and offer empirical evidence regarding the structural and relational implications from a KAM programme. In summary, the findings suggest that adopting a relational perspective through the development of key account management orientation (KAMO) will result in certain, necessary, structural reformation while allowing for specific relational skills to develop. Consequently, supplier's performance also improves. Moreover, this chain of effects remains strong independently of resources available to the supplier, suggesting that KAM can be a significant basis for developing a competitive advantage irrespectively of the supplier's size.     

Addressing a product management's orphan: How to externally implement product eliminations in a B2B setting

While product eliminations (PEs) may help suppliers reduce unprofitable products and the cost of increasingly complex portfolios, they often have deleterious consequences for customer–supplier relationships. This dilemma even increases as a supplier's attempt to mitigate deleterious consequences for customers through customer-oriented PE implementation may at the same time hinder optimal internal adjustments and related cost-saving potential, thus running counter to the actual purpose of PEs. This study investigates whether and how a supplier should act in the customer's interest to maximize gains from implementing PEs. We identify key approaches of customer-oriented PE implementation and performance outcomes. Using a multiple-informant supplier sample and a customer validation sample, we show that, depending on the availability of alternatives to customers and the type of PE implementation activity, customer-oriented PE implementation can either pay off considerably or be disadvantageous to a supplier. While PE compensation is always detrimental to overall PE performance, both PE communication and PE support are mostly beneficial. By contrast, PE participation is ambiguous to overall PE performance, as it generally helps retain customer goodwill but also decreases supplier cost-savings from PEs.     

Identifying the right solution customers: A managerial methodology

The purpose of this paper is to develop and apply a methodology for identifying, assessing and segmenting customers for business solutions. Firstly, criteria for evaluating solution customers are identified from the literature. These criteria are then refined and differentiated through interviews with 23 solution project managers. Secondly, a longitudinal case study with three solution suppliers and five of their customers is conducted to transfer the selection criteria into a managerial methodology which is validated by both solution suppliers and customers. The developed methodology comprises 21 criteria which are structured into two dimensions: the quality of the relationship to date and the customer's potential for future solution partnership. By combining these two dimensions into a portfolio analysis, four customer segments are identified to help suppliers determine customer attractiveness. The study's contribution lies in bridging academic knowledge and managerial practice to develop a new methodology for helping solution providers to make better informed decisions and reduce the risk of solution failure.     

Suppliers versus Lead Users: Examining Their Relative Impact on Product Variety

Collaboration with parties external to the new product development (NPD) process is seen as a means to reduce costs and improve the product offering to customers. On the suppliers' side, collaboration during the NPD process may lead to a faster and more efficient process. On the users' or customers' side, collaboration may provide ideas for entirely new products and/or modifications to existing ones. This paper examines how collaboration with suppliers and a group of users that experience needs unknown to the public, the so‐called lead users, affects the resulting variety of the products offered. The paper focuses on product variety because of its increasing perceived importance in the satisfaction of changing customer needs. Hierarchical regression analysis of survey data collected from 313 U.K. manufacturers revealed a significant positive relationship between collaboration and product variety. The key findings are that increasing the extent of collaboration with lead users and with suppliers during the NPD process will increase the variety of products offered to customers, and that lead users have a higher impact on product variety to suppliers. Previous studies have found that collaboration increases NPD performance, but to the best of the authors' knowledge, this is the first to explicitly explore the link with product variety. The paper concludes by discussing the findings' practical implications, limitations, and recommendations for future studies.     

An exploratory study into brand alignment in B2B relationships

B2B relationships are characterized by strategic partnerships between firms and the suppliers of goods and services integral to their offerings. Failure to choose the right partner could jeopardize the survival of both partners. While a number of studies suggest that partnering firms need to be aligned operationally, few studies look at whether there should be alignment between the brands of firms and their suppliers. Therefore, we build on existing studies on sexual selection to develop a theory of whether similarity in brand attributes affects the success of B2B relationships. We propose that firms wishing to portray particular brand images to their customers choose suppliers whose images mirror their own. To develop our proposition, we investigate the brand personality alignment between well-known firms and their suppliers in four industries. The findings of our analysis have significant implications for scholars and managers interested in the nature and success of B2B partnerships.     

From relationships to partnerships—new forms of cooperation between buyer and seller

An increased focus on operational performance and the reliance on fewer suppliers by industrial customers call for a higher quality of buyer-seller relationships.This article elaborates on economic explanations for value generated partnerships and describes the distinctive qualities of partnerships as something more than ordinary customer relationships. Particular attention is paid to the managerial implications and pitfalls awaiting companies when pursuing a partnership approach and a definition of vertical partnerships is provided.     

Strategic Value Assessment and Explorative Learning Opportunities with Customers

This study recognizes that collaboration with customers for new product development may bring important financial benefits to firms, but at the same time may seriously hamper explorative learning. Many firms are approached by customers with requests to develop new products for them. While such requests may strengthen customer relationships and result in short‐term financial gains, it may force a firm in technologically undesirable directions. As a result, many firms struggle with the dilemma of, on the one hand, responding to customer requests, and on the other hand, safeguarding the long‐term competitive position of the firm. Firms with strong customer ties are particularly prone to this dilemma. Drawing on opportunity recognition literature, capability monitoring literature as well as goal setting theory, the authors have developed a framework arguing that Strategic Value Assessment (SVA) can help resolve this. SVA is defined as an a priori business evaluation of the value of a particular innovation collaboration, based on anticipated long‐term strategic benefits. It helps innovative firms to focus on collaboration with customers with lead user status and to develop intense relationships, allowing for more effective knowledge transfer and learning. The framework is tested using data collected from a sample of 136 business‐to‐business firms in the Netherlands. The sampling frame was a panel of small and medium‐sized high‐tech enterprises. The study finds positive direct and indirect effects of SVA on explorative learning. In addition, the findings show that the intense collaboration/learning relationship is positively moderated by customer lead user status, and negatively moderated by customer dependence. The findings suggest that SVA is a useful heuristic for managers to utilize opportunities for innovation involving collaboration with customers.     

Perceptual gaps and similarities in buyer-seller dyadic relationships

The research aims to develop a conceptual framework to explore dyadic relationships across a range of industries, involving firms of different size (Medium Sized Enterprise (MSE) suppliers and Multinational Enterprise (MNE) buyers). The purpose is to explore dyadic views of three different relationship durations, identify where perceptual gaps may exist at the various stages, and address these in order to improve relational exchange. A triangulated methodology is implemented with data initially obtained from fifty-four dyads. These findings suggest: a) similar views are associated with the performance and importance attached to four relationship dimensions measured, b) significant perceptual differences are more apparent in shorter term relationships, c) overall suppliers have stronger views of the relationship, and d) relationships may not necessarily follow a linear development path over time. Three case studies offer qualitative insights, several managerial implications are extracted, and a strategic matrix developed related to the management of different typologies of relationship exchange.     

Customer attractiveness,supplier satisfaction and preferred customer status: Introduction,definitions and an overarching framework

Industrial markets are frequently characterized by an oligopolistic market structure. As a result, suppliers may become highly selective with respect to decisions that involve collaborating with certain customers. Buying firms must therefore be more attractive than their rivals to obtain opportunities to collaborate with these selective suppliers. This apparently counterintuitive inversion of the classical marketing approach (that is, relationships that involve buyers competing for suppliers rather than the other way round) constitutes the foundation of the special issue that is introduced in this paper. In this paper, we present key terms and propose a model of preferred customership that uses a social exchange perspective to link customer attractiveness, supplier satisfaction and preferred customer status. The papers that contribute to this special issue are introduced within the context of this framework. Finally, this paper concludes with suggestions for future research directions.     

How business customers judge customer success management

In business-to-business markets, customer success management is gaining growing practical importance. The concept comprises customer-related activities that aim at monitoring, securing and enhancing customer success as well as the implementation of the corresponding organizational structures and processes within the supplier firm. In contrast to existing research, this article takes a customer perspective to customer success management and investigates how business customers judge respective supplier activities; first, to reveal the quality dimensions business customers apply when assessing suppliers' customer success management activities, and second, to investigate how the quality of suppliers' customer success management activities leads to business customers' perceived value. Addressing these questions, this research contributes to literature by exploring customer success management from a customer perspective. The findings elucidate that customers' perceived value in use does not simply develop over time. Rather, through the implementation of customer-related activities of customer success management, suppliers can actively influence customers' value-in-use experiences thus fostering customers' rebuy decisions. From managerial perspective, the findings support suppliers in successfully shape their customer-oriented customer success management activities as well as the necessary internal structures and processes.     

The role of supplier performance in building customer trust and loyalty: A cross-country examination

Building trust in buyer–seller relationships is a focal issue in relationship marketing. However, there are mixed results concerning the performance outcomes of trust. Also, no attention has been given to linking supplier performance aspects to the development of trusting relationships. In this study we propose a conceptual model of supplier performance drivers and customer loyalty consequences of trust in supplier–organizational customer relationships. We test the model relationships using data from three different countries, namely, France, Hungary, and the U.K., in an effort to assess the extent to which the development and outcomes of trust are consistent across different countries. The results suggest that supplier performance in product quality and sales service quality is conducive to trust building across all three countries. Supplier performance in technical repair service support enhances trust in the market contexts of France and Hungary, but has no significant effect in the case of the U.K. Nonetheless, supplier performance in complaint handling has a positive effect on trust in the U.K. and French contexts, but no link is established in the context of Hungary. Further, the results show that trust enhances customer loyalty across all countries. Moreover, we find that firm size negatively moderates the trust–loyalty relationship in all the countries, with this link being not significant among larger firms in France and Hungary. The results have important theoretical and practical implications for international relationship marketing.