Manufacturer price reduction pressure and supplier relations

Manufacturer price reduction pressure and supplier relations Purpose – Manufacturer price reduction pressure on suppliers is an important contributor to helping a manufacturer maintain a strong competitive position by keeping costs low. The benefits of trusting supplier working relations also help strengthen a manufacturer's competitive position. The purpose of this paper is to determine if manufacturer price reduction pressure and trusting working relations with the pressured suppliers, typically considered to be mutually exclusive, can co‐exist. Design/methodology/approach – A structural equation modeling approach was used to analyze data covering 946 production buying situations involving 279 suppliers and six NA automotive OEMs. Findings – Manufacturer price reduction pressure and trusting working relations with the pressured suppliers, are not mutually exclusive, they can co‐exist. Research limitations/implications – The research found that it is not the pressure that impacts the manufacturer – supplier relations, but rather it is the manner by which the manufacturer goes about pressuring its suppliers that impacts its supplier working relations. The research, however, does not directly address how a manufacturer can achieve both ends simultaneously. Practical implications – Manufacturers no longer have to choose between exerting price reduction pressures on suppliers or working to achieve trusting relations with suppliers. They can successfully do both. At the same time, suppliers must recognize that these conditions may occur and when applied simultaneously ultimately benefit both parties. Originality/value – This research adds to the critically under‐researched B2B pricing processes and pricing impact areas, while helping to influence managerial actions, an area in which academic B2B research is considered to be lacking. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Business & Industrial Marketing Emerald Publishing

Manufacturer price reduction pressure and supplier relations

Loading next page...
 
/lp/emerald-publishing/manufacturer-price-reduction-pressure-and-supplier-relations-4fqKheBg7j
Publisher
Emerald Publishing
Copyright
Copyright © 2008 Emerald Group Publishing Limited. All rights reserved.
ISSN
0885-8624
DOI
10.1108/08858620810881566
Publisher site
See Article on Publisher Site

Abstract

Purpose – Manufacturer price reduction pressure on suppliers is an important contributor to helping a manufacturer maintain a strong competitive position by keeping costs low. The benefits of trusting supplier working relations also help strengthen a manufacturer's competitive position. The purpose of this paper is to determine if manufacturer price reduction pressure and trusting working relations with the pressured suppliers, typically considered to be mutually exclusive, can co‐exist. Design/methodology/approach – A structural equation modeling approach was used to analyze data covering 946 production buying situations involving 279 suppliers and six NA automotive OEMs. Findings – Manufacturer price reduction pressure and trusting working relations with the pressured suppliers, are not mutually exclusive, they can co‐exist. Research limitations/implications – The research found that it is not the pressure that impacts the manufacturer – supplier relations, but rather it is the manner by which the manufacturer goes about pressuring its suppliers that impacts its supplier working relations. The research, however, does not directly address how a manufacturer can achieve both ends simultaneously. Practical implications – Manufacturers no longer have to choose between exerting price reduction pressures on suppliers or working to achieve trusting relations with suppliers. They can successfully do both. At the same time, suppliers must recognize that these conditions may occur and when applied simultaneously ultimately benefit both parties. Originality/value – This research adds to the critically under‐researched B2B pricing processes and pricing impact areas, while helping to influence managerial actions, an area in which academic B2B research is considered to be lacking.

Journal

Journal of Business & Industrial MarketingEmerald Publishing

Published: Jun 13, 2008

Keywords: Supplier relations; Price positioning; Automotive industry

References

  • Relationship development and marketing communication: an integrated model
    Andersen, P.H.
  • The inevitability of conflict between buyers and sellers
    Emiliani, M.
  • Developing co‐operative buyer‐supplier relationships: a case study of Toyota
    Langfield‐Smith, K.; Greenwood, M.R.
  • Power influences in the supply chain
    Maloni, M.; Benton, W.C.
  • Characteristics of partnership success: partnership attributes, communication behavior, and conflict resolution techniques
    Mohr, J.; Spekman, R.E.
  • Success factors in strategic supplier alliances: the buying company perspective
    Monczka, R.M.; Peterson, K.J.; Handfield, R.B.; Ragatz, G.L.

You’re reading a free preview. Subscribe to read the entire article.


DeepDyve is your
personal research library

It’s your single place to instantly
discover and read the research
that matters to you.

Enjoy affordable access to
over 18 million articles from more than
15,000 peer-reviewed journals.

All for just $49/month

Explore the DeepDyve Library

Search

Query the DeepDyve database, plus search all of PubMed and Google Scholar seamlessly

Organize

Save any article or search result from DeepDyve, PubMed, and Google Scholar... all in one place.

Access

Get unlimited, online access to over 18 million full-text articles from more than 15,000 scientific journals.

Your journals are on DeepDyve

Read from thousands of the leading scholarly journals from SpringerNature, Wiley-Blackwell, Oxford University Press and more.

All the latest content is available, no embargo periods.

See the journals in your area

DeepDyve

Freelancer

DeepDyve

Pro

Price

FREE

$49/month
$360/year

Save searches from
Google Scholar,
PubMed

Create folders to
organize your research

Export folders, citations

Read DeepDyve articles

Abstract access only

Unlimited access to over
18 million full-text articles

Print

20 pages / month

PDF Discount

20% off