Monetary value of a supply chain relationship: What would it take to dump your partner?

Abstract

Purpose – This paper introduces a framework for measuring B2B relationship value and tests whether relationship value changes across various relationship levels. It measures relationship value in monetary terms and tests whether higher level relationships have higher value both for buyers and sellers. Design/methodology/approach – The data was collected using structured interviews with marketing managers and purchasing officers within the food manufacturing sector in New Zealand. The data was subjected to ANOVA statistical analysis. Findings – The findings suggest that lower level relationships (transactional) could be dropped for minimal additional financial gain but firms were willing to forego extremely attractive scenarios to keep their cooperative partners. Originality/value – Implications suggest that managers value cooperative relationships and are willing to forego very attractive prices in order to keep the non-price value components. If managers can ascertain what these valued components are and how they can be utilized, they can make themselves a highly valued partner