Vendor development strategies

Abstract

Unprecedented changes sweeping the world during the last few years have given rise to the need for the development and adoption of contingency strategies. This requires firms to have strategic flexibility in every aspect of their operation. Vendor development strategies constitute an important component in achieving this flexibility. Attempts to draw up an explicit conceptual link between generic business unit strategies and generic vendor development strategies. Proposes a vendor structure framework with three dimensions representing vendor structure scope, vendor structure relationship and vendor structure focus. Uses the framework to develop certain generic vendor development strategies. Considers the four generic strategies suggested by Porter, namely industry‐wide cost leadership strategy, industry‐wide differentiation strategy, segment cost leadership strategy and segment differentiation strategy and, for each one of these, proposes appropriate vendor development strategies.