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Distributors' customer-driving capability under supplier encroachment
Suppliers in business-to-business (B2B) markets often directly approach end customers in addition to using third-party distribution channels. This phenomenon, known as supplier encroachment, poses an increasing challenge to the distributor's profitability in the supply chain. However, little re...
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Published in: | Industrial marketing management 2021-04, Vol.94, p.52-65 |
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Main Authors: | , , |
Format: | Article |
Language: | English |
Subjects: | |
Citations: | Items that this one cites Items that cite this one |
Online Access: | Get full text |
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Summary: | Suppliers in business-to-business (B2B) markets often directly approach end customers in addition to using third-party distribution channels. This phenomenon, known as supplier encroachment, poses an increasing challenge to the distributor's profitability in the supply chain. However, little research has adopted the distributor's perspective to examine how it can overcome this challenge. This study addresses this gap by adopting the dynamic capability and network embeddedness theory to postulate the critical role of the distributors' customer-driving capability in tackling encroachment. Using survey data from 125 distributor firms in the semiconductor industry, we show that distributors' customer-driving capability significantly improves firm performance and that the impact strengthens when supplier encroachment is high. Moreover, we delineate the positive impacts of supplier relationship exploration, distributor relational embeddedness, and customer service excellence on distributors' customer-driving capability. Interestingly, supplier encroachment weakens the effects of supplier relationship exploration and customer service excellence but strengthens that of distributor relational embeddedness, indicating the importance of leveraging peer relationships under high supplier encroachment.
•From a distributor’s perspective, this study investigates how distributors can effectively respond to supplier encroachment.•We investigate the critical role of a distributor’s customer-driving capability in combating supplier encroachment.•A distributor’s customer-driving capability enhances firm performance, which is stronger when supplier encroachment is high.•Distributors can develop customer-driving capability by building relationships with various channel network entities. |
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ISSN: | 0019-8501 1873-2062 |
DOI: | 10.1016/j.indmarman.2021.02.007 |