Examining customer value perceptions of organizational buyers when sourcing from multiple vendors

Liu, Annie H.; Leach, Mark; Bernhardt, Kenneth L.

doi:10.1016/j.jbusres.2003.09.010

Cited by 140 publications

(132 citation statements)

References 39 publications

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“…Apparently, committing oneself to a more limited number of supply sources is considered by our purchasing respondents as something like putting your eggs in one basket, thus increasing the risk of supply uncertainty when the relationship turns sour. This is in line with what most research so far has observed (Haywood, 2001;Talluri and Narasimhan, 2003;Liu et al, 2005).…”

Section: Discussionsupporting

confidence: 92%

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Insights into the process of changing sourcing strategies

Faes

Matthyssens

2009

Journal of Business &Amp; Industrial Marketing

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Purpose -The aim of this article is to identify the motivations driving the process of changing sourcing strategy from single sourcing to multiple sourcing or vice versa. Design/methodology/approach -Ten cases of sourcing strategy change were investigated. A qualitative research method is used to uncover the richness of these change processes. Findings -Most of the advantages and disadvantages stated in the literature were confirmed. Identical objectives (cost cutting and quality improvement) were present in all cases, although changes took place in opposite directions. Contextual factors, such as standardisation and supplier base reduction efforts shape purchasing strategy more than previously thought. The dynamic nature of the product lifecycle also seems to be an important determinant.Research limitations/implications -Although the results of qualitative case study research can only be "generalised" in a limited way, the case details help to identify the dynamics of sourcing strategy switches and to interpret the rationale behind these moves. Confirmatory follow-up research covering both the demand and supply side of the market is needed. Practical implications -Switching sourcing modes is of strategic relevance to managers as lifecycle costing strategies are influenced by them. Managers should plan these decisions more effectively, evaluating the factual pros and cons of a proposed sourcing mode switch and taking the dynamics of supply markets into account. Originality/value -The importance of the different motives for sourcing strategy changes clearly varies with the dynamism of the context (market situations and strategic intentions of buyers). A model linking the buyers' portfolio matrix to the product life cycle on the supply market is proposed.Keywords Single sourcing, Purchasing, Sourcing, Strategic change, Supplier evaluation Paper type Research paperAn executive summary for managers and executive readers can be found at the end of this issue. Problem statementOne of the most important strategic problems facing purchasing managers is the selection of an appropriate number of suppliers for each product purchased. Several solutions have been presented in literature, ranging from single sourcing via dual and parallel sourcing (Richardson, 1993) to multiple sourcing. Each strategy has its advantages and drawbacks. Most of the research takes a static approach to purchasing strategy and considers the chosen sourcing option to be relatively stable over time. But strategies do change. So far, only Dubois and Gadde (1996) and Araujo et al. (1999) have depicted changes in sourcing strategies. In this paper the existing literature is complemented by identifying changes in sourcing strategy and by investigating the following questions:.

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Section: Discussionsupporting

confidence: 92%

“…2 Up to our knowledge, sourcing switches have only been studied by Liu et al (2005). However, these authors merely approach the subject from a marketing perspective looking at how buyers' value perceptions change when "moving" towards multiple sourcing.…”

Section: Notesmentioning

confidence: 99%

Insights into the process of changing sourcing strategies

Faes

Matthyssens

2009

Journal of Business &Amp; Industrial Marketing

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“…A buyer generally tries to avoid dependence on a particular supplier (Liu, Leach, & Bernhardt, 2005) but companies today tend to trade in some of their independence against cost savings by having fewer, heavily bound, high value suppliers (Swift & Coe, 1994). Suppliers, on the other hand, try to stabilize their customer base because customer retention is less costly than customer acquisition (Reichheld, 1993).…”

Section: Role Differences In Buyer-seller Relationshipsmentioning

confidence: 99%

The bonding effects of relationship value and switching costs in industrial buyer–seller relationships: An investigation into role differences

Geiger

Durand

Saab³

et al. 2012

Industrial Marketing Management

120

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“…It is significant to note that while Latham acknowledges the importance of value creation within the construction supply chain, literature concedes that there is a degree of complexity associated with the concept of value (Aarikka-Stenroos and Jaakkola, 2012;Sánchez-Fernández and Iniesta-Bonillo, 2007). Notwithstanding which, considerations of value and its appropriation are seen to influence buyer behaviour (Cox, 2004;Liu et al, 2005). Gadde et al (2010) recognise that business relationships will always be characterised by both conflict and co-operation, as the parties simultaneously hold both contradictory and shared interests.…”

Section: Introductionmentioning

confidence: 99%

The ‘transaction X-ray’: understanding construction procurement

Aitken¹,

Paton

2016

Proceedings of the Institution of Civil Engineers - Management,

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2This paper presents the results of a case study, the Construction Case, which examines procurement practices within the UK construction supply chain and compares these with a more general UK sample taken from non-construction sectors. Using a qualitative methodology, the approaches to relationship management and buyer value perception are graphically mapped, using an innovative 'transaction X-ray' technique. The Construction Case considers procurement transactions conducted at various points along the construction value chain: the client, the construction firm and the specialist contractor. Recognising that the research design favours a small sample size, and thus limits generalisability beyond the boundaries of the case, the paper finds that construction industry procurement operates in an adversarial and largely arm's-length manner. While procurement practice is found to share common aspects with other industrial sectors, the case demonstrates that the construction industry is more adversarial and less collaborative than is the average found across the other sectors examined. The paper outlines a useful framework whereby construction practitioners can evaluate elements of procurement practice within their own organisations, and also signposts the required direction for future research in order to reflect the gap, suggested by the case, between current normative theory and construction procurement practice.

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Examining customer value perceptions of organizational buyers when sourcing from multiple vendors

Cited by 140 publications

References 39 publications

Insights into the process of changing sourcing strategies

Insights into the process of changing sourcing strategies

The bonding effects of relationship value and switching costs in industrial buyer–seller relationships: An investigation into role differences

The ‘transaction X-ray’: understanding construction procurement

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