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Keywords Suppliers, Vendors, Selection, Sourdng, Channel relations, Corporate strategy
Abstract The competitive business environment in the automotive industry has forced vehicle manufacturers (VMs) to improve their relationship strategies towards their suppliers. VMs have impkmented supplier segmentation in order to optimise current business activities and existing resource allocations. Supplier selection criteria have also become crucial in order to achieve an appropriate evaluation of suppliers. Models of supplier segmentation and supplier selection criteria underpin theoretically this research. Empirical illustrations of supplier segmentation based on the perspectives of a VM and its suppliers are presented. The principal contributions of this study are the various models therein. One of the models consists of two dimensions: the supplier's commitment to a VM; and the commodity's importance to a VM. In extension, another model of dynamic relationship strategies is introduced. It consists of four relationship strategies towards suppliers in the automotive industry, such as family, business partner, friendly, and transactional Furthermore, a four-phase process for the analysis, selection, and managerial decision of a dynamic relationship strategy towards suppliers in the automotive industry is outlined.
Introduction and research objective
The competitive marketplace in many industries has forced companies to improve current business activities and existing resource allocations to sustain their turnover, to defend their market share, to maintain their profitability, and to conserve other key measures of the company's well-being. The corporate resource allocation has become an essential issue in this process. The restructuring and re-engineering of companies' business processes are ongoing evolutions and a reality in many industries. They have become necessities for survival.
Vehicle manufacturers (VMs) in the automotive industry have restructured and re-engineered their business processes on several occasions during the last century. These changes have been implemented upstream towards suppliers and downstream towards customers. The topic of this research is limited to upstream considerations towards first-tier suppliers. This research is also restricted to VMs' relationship strategies towards suppliers in terms of supplier segmentation.
Supplier segmentation is one fundamental business activity to improve the outcome of a company's efforts to maintain and enhance its position in the marketplace, as well as customer segmentation, market targeting, and positioning (i.e. strategic marketing). The pioneering work of Kraljic (1983) is often considered as a breakthrough in the purchasing area in developing...