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Supplier Innovativeness And Supplier Pricing: The Role Of Preferred Customer Status

Author

Listed:
  • HOLGER SCHIELE

    (University of Twente, the Netherlands)

  • JASPER VELDMAN

    (University of Twente, the Netherlands)

  • LISA HÜTTINGER

    (University of Twente, the Netherlands)

Abstract

In this article, we study the antecedents of supplier innovativeness and supplier pricing. Based on an extensive literature review, we identify different types of antecedents: (1) 'technical' antecedents, which include the capabilities of suppliers to innovate (such as their level of R&D investment) and (2) 'behavioural' antecedents, which focus on the position of the buyer as a supplier's preferred customer. We hypothesise that the two antecedents influence supplier innovativeness in a positive way. Furthermore, we analyse supplier pricing behaviour. We assume that suppliers' awareness of their capabilities to innovate might provoke them to charge unfair prices, while preferred customer status may reverse this tendency and lead to more benevolent supplier pricing behaviour. We test the conceptual framework using a sample of 166 buyer-supplier relations. We find out that technical and behavioural antecedents can explain supplier innovativeness to a large extent, with the role of preferred customer status striking out. Remarkably, whereas we expected that suppliers who are involved in innovation would be found to charge higher prices for their contributions to newly developed products, our results show that this effect is not statistically significant. The missing link between supplier pricing and supplier innovativeness can encourage firms to engage in collaborative innovation, at all, because buyers do not need to fear being overcharged. Implementing a preferred customer policy can improve the conditions for innovating with suppliers.

Suggested Citation

  • Holger Schiele & Jasper Veldman & Lisa Hüttinger, 2011. "Supplier Innovativeness And Supplier Pricing: The Role Of Preferred Customer Status," International Journal of Innovation Management (ijim), World Scientific Publishing Co. Pte. Ltd., vol. 15(01), pages 1-27.
    • Handle: RePEc:wsi:ijimxx:v:15:y:2011:i:01:n:s1363919611003064
    DOI: 10.1142/S1363919611003064
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    References listed on IDEAS

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    1. Chris Freeman & Luc Soete, 1997. "The Economics of Industrial Innovation, 3rd Edition," MIT Press Books, The MIT Press, edition 3, volume 1, number 0262061953, April.
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    Cited by:

    1. Jianli Luo & Chen Ji & Chunxiao Qiu & Fu Jia, 2018. "Agri-Food Supply Chain Management: Bibliometric and Content Analyses," Sustainability, MDPI, vol. 10(5), pages 1-22, May.
    2. Sabari R. Prasanna, 2022. "The role of supplier innovativeness in the humanitarian context," Annals of Operations Research, Springer, vol. 319(1), pages 1359-1377, December.
    3. Christian Linder & Sven Seidenstricker, 2017. "Does The Supplier Affects Consumers’ Product Performance Expectations? An Analysis About The Innovativeness Perception," International Journal of Innovation Management (ijim), World Scientific Publishing Co. Pte. Ltd., vol. 21(01), pages 1-27, January.
    4. Mingchun Cao & Ilan Alon, 2020. "Intellectual Structure of the Belt and Road Initiative Research: A Scientometric Analysis and Suggestions for a Future Research Agenda," Sustainability, MDPI, vol. 12(17), pages 1-40, August.
    5. Marika Makkonen & Anna Aminoff & Katri Valkokari, 2018. "Stimulating Supplier Innovation In A Complex And Regulated Business Environment — A Dyadic Case Study," International Journal of Innovation Management (ijim), World Scientific Publishing Co. Pte. Ltd., vol. 22(03), pages 1-34, April.
    6. Zhang, Chun & Henke, John W. & Viswanathan, Sridhar, 2015. "Reciprocity between buyer cost sharing and supplier technology sharing," International Journal of Production Economics, Elsevier, vol. 163(C), pages 61-70.
    7. Ricarda Bouncken & Boris Plüschke & Robin Pesch & Sascha Kraus, 2016. "Entrepreneurial orientation in vertical alliances: joint product innovation and learning from allies," Review of Managerial Science, Springer, vol. 10(2), pages 381-409, March.
    8. Janina Milena Goldberg & Holger Schiele, 2019. "Innovating With Dominant Suppliers: Lessons From The Race For Laser Light," International Journal of Innovation Management (ijim), World Scientific Publishing Co. Pte. Ltd., vol. 24(01), pages 1-26, January.
    9. Antonella La Rocca & Ivan Snehota, 2021. "Mobilizing suppliers when starting up a new business venture," Post-Print hal-03328945, HAL.
    10. Duffy, Rachel & Fearne, Andrew & Hornibrook, Sue & Hutchinson, Karise & Reid, Andrea, 2013. "Engaging suppliers in CRM: The role of justice in buyer–supplier relationships," International Journal of Information Management, Elsevier, vol. 33(1), pages 20-27.
    11. Pulles, Niels J. & Schiele, Holger, 2013. "Social Capital Determinants of Preferential Resource Allocation in Regional Clusters," management revue - Socio-Economic Studies, Nomos Verlagsgesellschaft mbH & Co. KG, vol. 24(2), pages 96-113.
    12. Philip Beske-Janssen & Thomas Johnsen & François Constant & Andreas Wieland, 2023. "New competences enhancing Procurement’s contribution to innovation and sustainability [De nouvelles compétences renforçant la contribution des achats à l'innovation et au développement durable]," Post-Print hal-04191381, HAL.
    13. Rosaria Marcone, Maria, 2019. "Innovative Supply Chain in Italian Knitwear Industry. The Case of Medium-Sized Firms," 7th International OFEL Conference on Governance, Management and Entrepreneurship: Embracing Diversity in Organisations (Dubrovnik, 2019), in: 7th International OFEL Conference on Governance, Management and Entrepreneurship: Embracing Diversity in Organisations. April 5th - 6th, 2019, Dubrovn, pages 224-235, Governance Research and Development Centre (CIRU), Zagreb.
    14. Vos, F.G.S. & Van der Lelij, R. & Schiele, H. & Praas, N.H.J., 2021. "Mediating the impact of power on supplier satisfaction: Do buyer status and relational conflict matter?," International Journal of Production Economics, Elsevier, vol. 239(C).
    15. Maximilian A. Maier & Peter Rück & Alexander Brem, 2017. "How to Integrate Suppliers into the Innovation Process? An Explorative Case of Champion Formalization in the Purchasing Department in Times of Open Innovation," International Journal of Innovation and Technology Management (IJITM), World Scientific Publishing Co. Pte. Ltd., vol. 14(06), pages 1-17, December.
    16. Mohammad H. Eslami & Nicolette Lakemond, 2016. "Internal Integration In Complex Collaborative Product Development Projects," International Journal of Innovation Management (ijim), World Scientific Publishing Co. Pte. Ltd., vol. 20(01), pages 1-28, January.
    17. Shafiq, Asad & Johnson, P. Fraser & Awaysheh, Amrou, 2019. "Emerging economy sourcing: Implications of supplier social practices for firm performance," International Journal of Production Economics, Elsevier, vol. 218(C), pages 148-158.

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