The internal competitor: buyer motives and marketing strategies

Suppliers often face internal competitors. An internal competitor exists when a buyer simultaneously sources the same components from both an internal production unit and an external supplier. Based on a literature review we identify several different buyer motives for supporting such internal competitors. Though it may be difficult for an external supplier to immediately identify relevant buyer motives, the different motives suggest that these buyers should be targeted with different marketing strategies. For each buyer motive possible marketing strategies are suggested and briefly discussed. For example, it is discussed (1) how the external supplier may try to replace the internal competitor, (2) how the external supplier may try to operate in parallel with the internal competitor, and (3) when the external supplier should refuse to deliver to a customer with internal production of the same components.