Gasoline Prices and ConsumerBehavior Political. Businesses are very vulnerable to changes in the political situation. For example, because consumer groups lobbied Congress, more stringent rules were made on the terms of car leases. The tobacco industry is currently the target of much negative attention from government and public interest groups.
Jap and Barton A. Weitz,Related Topics: When Ford worked with Intel to design a unique microprocessor that would optimize car performance, it achieved a significant advantage over competitors who used a standard microprocessor.
It is well known in the marketplace that buyer-supplier relationships can offer potential strategic advantages to both partners.
However, less is known about how firms make the decision to work closely together to "expand the pie" of benefits.
The payoffs, they suggest, are significant: Common Goals and Complementary Competencies Using over buyer-supplier dyads of four Fortune 50 firms, Jap and Weitz tested their model at two points in a one-year time period. They found that firms decide to develop strategic advantages by evaluating certain characteristics of the buyer-supplier relationship.
Trust is an important factor, but not entirely necessary. The decision to develop strategic advantages is not solely a matter of trust.
If there is a low level of trust in the relationship, firms can still work together and be assured that the other firm will not act opportunistically. For example, idiosyncratic assets, such as manufacturing facilities or newly developed skills or technologies, may act as "credible commitments" early in the relationship.
Common goals can act as substitutes for trust. If there is a low level of trust between the buyer and supplier, the members will look at the extent to which they share similar goals. Similar goals-for example, to offer a superior product to the marketplace, or to reduce time to market-can provide an assurance that each partner will work toward joint benefit and not pursue individual gains that may be detrimental to the relationship.
For suppliers, in particular, it is important to know that they are moving in the same direction as their customer.
Complementary competencies are an important factor in the decision to work closely together.
It is not sufficient for buyers and suppliers to bring a set of abilities to the relationship. It is the complementarity of the abilities, skills, and knowledge of the partners that helps the buyer and supplier to achieve synergistic results.
In fact, for buyers, complementary competencies are the most important factor, providing a powerful assurance that the supplier has the necessary abilities to successfully expand the "size of the pie" between the parties.
Strong and Sustainable Payoffs There are clear payoffs from working closely together, and these payoffs are sustainable over time, the study concluded. Buyers and suppliers who decide to work closely together to develop strategic advantages are generally successful at achieving these advantages, increasing joint profits, and creating unique assets.
The results are synergistic: In addition, the relationship-which often requires considerable time and effort as well as the exchange of tacit, complex, and specific information-is inherently difficult for competitors to observe and imitate.
These outcomes provide a powerful basis from which the buyer and supplier can work together in the future, as well as a competitive edge over other buyers and suppliers in the marketplace.
Weitz is the J. Henderson, and Robert W. Palmatier,  Explores the theoretical underpinnings of relationship marketing: What is relationship marketing?Marketing Bulletin, , 13, Article 2 Page 1 of 14 r-bridal.com Start studying Marketing Chapter 5.
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