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Published by: Indiana University
Published in: "Business Horizons", 2002

Abstract

Because companies can no longer possess all competencies themselves, strategic partnerships between customers and suppliers are becoming more and more essential. In fact, firms rely on strategic partners to achieve and sustain a competitive position. Theory helps explain the choice between arm''s-length and cooperative relationships, and practice provides some valuable examples. Strategic partnerships, however, need to be set up and managed--a process not yet well understood. Companies often lack strategic thinking and the necessary supplier management capabilities. Advanced corporations continuously improve internal and external collaboration. Moreover, they allocate their scarce resources and time by selectively managing the full range of relationships--from "discrete exchange" to "relational exchange"--across the supplier portfolio.

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Abstract

Because companies can no longer possess all competencies themselves, strategic partnerships between customers and suppliers are becoming more and more essential. In fact, firms rely on strategic partners to achieve and sustain a competitive position. Theory helps explain the choice between arm''s-length and cooperative relationships, and practice provides some valuable examples. Strategic partnerships, however, need to be set up and managed--a process not yet well understood. Companies often lack strategic thinking and the necessary supplier management capabilities. Advanced corporations continuously improve internal and external collaboration. Moreover, they allocate their scarce resources and time by selectively managing the full range of relationships--from "discrete exchange" to "relational exchange"--across the supplier portfolio.

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