The Structural and Executional Components of Customer Concentration: Implications for Supplier Performance
Year: 2016
Type: article
Abstract: ABSTRACT We examine how suppliers' structural decisions (strategic choices regarding scale, scope, and complexity) and executional skills (drivers that support the day-to-day operations of the firm) influence its customer base concentration and, in turn, supplier performance. We investigate our research question through an in-depth study of suppliers in the apparel industry. We find that suppliers' structural decisions have an important relation to the level of a supplier's customer concentration. However, we find little evidence that the component of concentration arising from structural decisions is associated with supplier performance (both financial and operational). Instead, the favorable relation between supplier performance and suppliers' customer concentration is primarily driven by the component of concentration arising from suppliers' executional skills. Our evidence indicates that greater customer concentration in and of itself does not relate to the anticipated benefits and risks, which has implications for our understanding of how concentration impacts suppliers. Data Availability: All data are publicly available from the sources indicated in the text.
DOI: 10.2308/jmar-51605
Authors: Ella Mae Matsumura, Jason D. Schloetzer
Institutions: University of Wisconsin–Madison, Georgetown University
Language: English
Subfield: Management Information Systems
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W2525220337