Essays on supplier responsiveness and buyer firm value - Nyenrode ...

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3.3 Discussion The main objective of this study was to understand whether the model developed in Chapter 2 would be robust and hold across nations. To that end we were interested in finding whether IdRR is an important mediator as stated in Chapter 2 and whether buyer satisfaction (relational indicator) is linked to buyer profits. We first tested a full replica of the model in Chapter 2. Model 1 did not was too large for our small sample size; therefore, we decided to split the model into two smaller models (the satisfaction mediator route and the IdRR and Supplier brand value mediator route) and rerun the analysis. As reflected by Table 3.4, Model 2 has better fit statistics on four indices namely, GFI (0.945), CFI (0.987), TLI (0.981) and RMSEA (0.040), than the model in Chapter 2. Whereas, model 3 is only better on GFI (0.95) than the model in Chapter 2. This is probably because there are fewer items and more data points to estimate those items, which results in a better fit. The effects for hypotheses 1 and 4 are stronger in model 2 than in the model in Chapter 2. For hypothesis 5 the effects are stronger in the Chapter 2 model. For hypothesis 1 we conjecture that as The Netherlands is culturally homogeneous, it is easier for suppliers to reduce their IdRR, as they better understand each other’s needs. As Hofstede (2003) states, heterogeneous societies can have great variations along their cultural dimensions. On the other hand, the US managers tend to score higher in uncertainty avoidance than Dutch managers do on the Hofstede index (Figure 3.1). But as The Netherlands is relatively ethnically homogeneous, we understand that managers believe that their strategic suppliers are more attuned to their needs because of cultural understanding. This results in the effect of supplier responsiveness of IdRR being slightly stronger in The Netherlands. An alternative explanation could be that, in essence, reducing IdRR involves creating an idiosyncratic response and that does not have much application to other customers of the strategic supplier. As the United States is highly masculine and oriented towards achieving maximum profits, it is possible that suppliers are willing to create an idiosyncratic response to a degree, and when diminishing returns start setting in they stop further investments in such responses. On the other hand, in The Netherlands, with its greater focus on relationships because of its feminine culture, no attention is paid to this point of diminishing returns. For hypotheses 4 we find that the effect of IdRR on supplier brand value is marginally stronger in The Netherlands than the model Chapter 2. There is not much in the extant literature on this hypothesis for comparison in B2B contexts. However, risk reduction has been identified as an important function of B2B brands (Sanzo et al., 2003). What makes our finding unique is that we have proposed risk reduction as an antecedent to purchasing B2B brands in The Netherlands and the United States. This is similar to findings from consumer research where risk reduction is a motivating factor for consumer to purchase a brand (Kotler, & Pfoertsch, 2006). This direct experience ensures that customer IdRR will be reduced, and hence, our findings are pertinent as they provide evidence that B2B buyers are also motivated by risk reduction factors. Hypothesis 5 provides evidence that being associated with a strategic supplier’s brand increases the buyer firm’s value. This could be because of one of two mechanisms. One could be because of the benefits of ingredient branding. And the other reason could be because of a networked effect that signals to external customers that the buyer’s firm produces high quality 90
products. Overall, the effects of supplier brand value is stronger in the United States than in The Netherlands. In hypothesis 3 we find that buyer satisfaction has a positive influence on buyer firm value in model 2, but in the model in Chapter 2 it does not. In the United States at a more granular level it might be that relational metrics alone (satisfaction) do not influence the buyer’s firm value, or indeed the customer’s intention to repurchase from the supplier. This reinforces the existing perspective that customer satisfaction as a metric is of little or no significance in B2B strategic contexts in the United States. Furthermore, this also adds a new dimension to the intra-organizational perspective by Ghosh and John (2009) and Drucker (1984) that firm commitment to customer satisfaction would lead to superior firm performance. Firms in the strategic context seem to be committed to measurable value creation rather than generating satisfaction alone. But Bowman and Narayandas (2004) find that in the United States, high volume customers have a lower baseline satisfaction, and that large customers are less likely to change their vendors because of specific investments they have made with their vendors and a long-term profit focus. Our findings are partially in line with what they found as in the United States customer satisfaction does not matter in strategic contexts. On the other hand, in The Netherlands because of its more feminine culture, we find that satisfaction does matter. A major contribution of this research is that we have highlighted that the role of satisfaction varies across nations in B2B contexts. Furthermore, we have also added to prior research in The Netherlands that showed customer satisfaction positively influences suppliers’ financial performance by adding a new perspective that buyer satisfaction positively influences the buyer firms own value. The role risk played in the strategic supplier market orientation and customer performance is different in different national cultural contexts. In general, we were able to provide some evidence that a strategic supplier’s responsiveness influences the customer’s idiosyncratic risk and transcends national borders in industrialized countries. Furthermore, this influences the customer’s future firm value and loyalty towards the supplier’s brand. This is an important finding because in traditional marketing thought (Kohli & Jaworski, 1993), the firm’s responsiveness is positively associated with the firm’s risk. However, our study demonstrates that in the context of strategic relationships the supplier’s responsiveness is associated with a lower risk profile, since the customer’s variation and volatility in their cash flows and profits decreases. Bowman and Naryandas (2004) find that high volume customers have a lower baseline satisfaction. They argue that large customers are less likely to change their vendors because of specific investments they have made with their vendors and a long-term profit focus. Our findings are partially in line with what they found. We find that indeed customer satisfaction does not matter in strategic contexts; however, it is not only because of a long-term focus, but rather because of their idiosyncratic risk. In other words, relation specific investments or costs are just one component of the overall idiosyncratic risk. Likewise the long-term focus linkage to a market orientation is a widely recognized, yet empirically disputed link (Slater & Narver, 1990; Grewal & Tansuhaj, 2001). But even in studies where evidence for market orientation influencing the firm’s profitability was found, evidence for a linkage to long-term orientation has been scant. However, since we examine strategic 91
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ISBN 978-90-8980-055-8 © M. Abrahi
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Examination Committee Supervisor: P
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2.3 DEVELOPMENT OF THE CONCEPTUAL M
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5.1 RESEARCH FINDINGS 114 5.2 OVERA
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List of Tables Table 2.1 Representa
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PREFACE Oscar Wilde once said, “I
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Chapter 1 Introduction to the Thesi
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Figure 1.1 Mckinsey Survey Results
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1.4 Scope PhD thesis This thesis fo
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Netherlands. We used the maximum li
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2.1 Introduction A central tenant o
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only provide an assessment of the s
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Table 2.1 highlights several promin
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other hand, they later argue that m
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Therefore, there is a convergence i
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usiness performance, firms need to
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means is that the more better a str
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Supplier responsiveness or market o
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Naryandas, 1995). Further, idiosync
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Page 121 and 122: Summary in English This dissertatio
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Langerak, F. (2001). Effects of mar
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Quelch, J. (2007). How to brand an
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Verhoef, P. C., & Leeflang, P. S. H
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1. The name of the company where yo
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9.The supplier seems to have good i
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17. The supplier takes a very long
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25. If the supplier were to find ou
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33.Does your strategic supplier als
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41.To what degree do those specific
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Supplier Brand Value 51.How likely
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Appendix B Scatter Plot Diagrams fo
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