Managing Relationships With Customers And Suppliers: Law, Economics And Strategy

Vertical relationships – contracts or ownership and control, enable firms to exercise extensive control and influence over a supplier or retailer. Such vertical links can increase firms'competitiveness in a whole range of ways. Some of these – reducing costs through integrating processes or ensuring effective product retailing also serve the consumer interest. Others, preventing retailers from offering competing products, for example, don't; and this explains the suspicion with which such links are often viewed by the competition authorities. The consequence is that strategy for vertical relationships must encompass commercial, economic and legal dimensions. It is a key element in corporate strategy in many industries.