Relationship Marketing Strategy and implementation

products and Honda with a platform for developing its European

business. On the other hand, suppliers have usually been thought of

merely as the providers of goods and services and where often an

‘arms’-length’ stance was adopted by the firm.

However, it is now widely recognized that the management of the

relationship with both alliance and supplier partners has to be

viewed as a critical business process. The strength of any business

will increasingly be determined by how well it manages these rela-

tionships.

It is perhaps helpful to think of alliances as horizontal partner-

ships and suppliers as vertical partnerships – ‘horizontal’ in the

sense that an alliance partner can be viewed as playing a value-

creating role within the firm’s value chain and ‘vertical’ in the sense

that suppliers can be seen as an extension of the firm. The basic

model is summarized in Figure 3.2.

In this model, sometimes termed ‘the extended enterprise’, sup-

pliers and alliance partners link with the core organization to enable

more cost-effective, timely and innovative offers to be presented to

customers. Virtual integration seeks to gain the benefits that accrue

to companies who focus on core competencies whilst providing the

advantages of coordination and integration that can flow from ver-

tical integration.

As a result, it is coming to be recognized that the management of

these interlocking networks of organizations – and in particular the

relationships between them – is vital to competitive success. Thus

we would argue that one of the central elements of a relationship

marketing strategy has to be the way that supplier and alliance

‘markets’ are proactively managed.

This chapter will explore some of the emerging trends in supplier

164 Relationship Marketing

Horizontal
alliance
relationships

Vertical supply relationships

Figure 3.2 The firm’s value chain.