Sustaining commitment in preferred buyer-supplier relationships: How to retain the ‘customer of choice’ status?

Andrea S. Patrucco, Tobias Schoenherr and Antonella Moretto

International Journal of Production Economics, 2024, vol. 270, issue C

Abstract: Securing commitment and preferential treatment from suppliers is crucial for buying firms in a competitive marketplace. This study delves into the dynamics of how buying firms, which have already earned preferential treatment and thus already had been recognized as preferred customers or ‘customers of choice,’ can sustain supplier commitment and preserve this coveted status in a competitive market. Anchoring our investigation into the foundational principles of transaction cost economics and social exchange theory, we offer a novel theoretical perspective by examining the interplay of buyer behaviors and attributes, including supplier development and involvement, information sharing, market attractiveness, operative excellence, importance for the supplier's business, and relationship continuity expectations. To gain insight into these dynamics,we analyze primary survey data from 215 strategic buyer-supplier dyads through structural equation modeling. Our analysis reveals that supplier development and involvement directly fosters sustained commitment. Intriguingly, the role of information sharing is found to have asignificant impact as well, albeitindirectly, mediated through the buyer's characteristics. Additionally, while supplier development, involvement, and information sharing positively influence expectations regarding relationship continuity, a similar mediating effect on sustained commitment is absent. By further employing Fuzzy Set Qualitative Comparative Analysis, our study uncovers three distinct configurations that buyers can leverage to sustain supplier commitment and secure their ‘customer-of-choice’ status. These findings extend the theoretical understanding of buyer-supplier collaboration dynamics and provide practical insights for buyers striving to enhance the value and longevity of their supplier relationships.

Keywords: Or phrases: supplier commitment; Preferred status; Buyer-supplier relationships; Structural equation modeling; Fuzzy set comparative qualitative analysis (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:proeco:v:270:y:2024:i:c:s0925527324000227

DOI: 10.1016/j.ijpe.2024.109165

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