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Not by partnership alone: managing a portfolio of relationships

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Over the last few years, the business press and academic literature have been exhorting firms to move away from arm's length relationships and toward longer term and collaborative partnerships with external business partners. We would like to warn against the new "partnership fad" which may result in indiscriminately developing and nurturing collaborative relationships with some suppliers when less costly and less risky options can provide the sufficient benefits. Plotting the level of specific investments both sides make into the relationship we identify 4 types of relationships: 1) market exchange relations, 2) buyer captive relations, 3) supplier captive relations and 4) strategic partnerships. We then construct the product, market and supplier profile for which each type of relation is typically suited for. Finally, we offer suggestions about how each type of relationship is managed differently in terms of the level and mode of information sharing the climate and the processes in the relationship

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en

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application/pdf

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http://flora.insead.edu/fichiersti_wp/inseadwp1996/96-30.pdf

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Copyright INSEAD. All rights reserved