Suppliers’ power relationships with industrial key customers

This paper aims to incorporate material derived from four case study analyses of industrial business-to-business relationships. Although there is a substantial amount of literature on the concept of power, there is little academic research studying the “perception” of power – especially that of key customers’ suppliers – relative to that of the buying company. This paper develops a framework, which provides a different set of perceptions regarding the nature of supplier-key customer relationship.

The case studies involve four firms that have been long-term suppliers to a number of global industrial companies and who have set up key account programs to work with them. Three suppliers are in the corrugated cardboard industry (two large and one medium-sized company) and one supplier (a medium-sized company) is in the coding equipment industry.

The study develops a power framework, which can be used in the analysis of buyer/supplier power and points out the risk that can arise when one or more of the parties involved operates on the basis of perceptions that are incorrect.

The results suggest that the actors’ power perceptions are important constructs, which have so far been neglected in the academic literature, and stress the role of “subjectivity” in the actors’ analysis of power.