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Effects of channel members’ customer-centric structures on supplier performance

Abstract

The authors examine the upstream impact of a firm’s customer-centric organizational structure on its supplier, including both positive effects of greater revenue and negative effects of demanding services that raise the supplier’s costs. These countervailing effects on supplier profit are moderated by characteristics of the firm’s buying center and the firm–supplier relationship, in accordance with the value capture literature. Study 1 examines the proposed firm-level financial effects of the dual processes, using surveys of industrial firms matched with secondary data from their supplier. Study 2 assesses the supplier-level net impact of the dual processes, using publicly available data to shed light on the upstream financial impact of firms’ customer-centric structures across a broad sample of Fortune 500 suppliers. Findings highlight the need for a supplier to proactively assess the structure of each buyer-firm, as a supplier can take steps to mitigate cost effects and enhance revenue effects.

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Notes

  1. We employ the term buyer-firm when describing the firm from the supplier’s perspective.

  2. These statements are based on moderator levels one standard deviation above and below the mean.

  3. Market orientation has also been linked to market intelligence; for a detailed discussion of the relationship between customer-centric structure, market intelligence, and market orientation, please see Web Appendix A.

  4. We thank the review team for this suggestion.

  5. We are thankful for the review team’s suggestion.

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Correspondence to Andrew T. Crecelius.

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Shrihari Sridhar served as Area Editor for this article.

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Crecelius, A.T., Lawrence, J.M., Lee, JY. et al. Effects of channel members’ customer-centric structures on supplier performance. J. of the Acad. Mark. Sci. 47, 56–75 (2019). https://doi.org/10.1007/s11747-018-0606-5

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Keywords

  • Marketing channels
  • Customer-centric structure
  • Value capture
  • Supplier performance
  • Financial performance