Supplier Development within Dyadic Relationships in the Swedish Furniture Retail Industry

Abstract: Globalization and associated economic changes have led to a lot of opportunities and hazards that companies are facing. Especially the increased role of customer demands and the interconnected shift from seller markets to buyer markets were the driving factors and incentives for the research work of this Master Thesis. One quite new strategy that companies tend to apply in order to meet the occurring challenges is supplier development. By reason of the actuality of this topic, it was of high worth to investigate, especially when it comes to the lack of theoretical findings about challenges, difficulties and problems. Therefore, the main objective of this thesis was to find out which problems can occur in the process of supplier development, and how they can be solved. Hereby, the focus was laid on the furniture retail industry, as it is one of the fastest growing sectors in Sweden. For the empirical research the retailers Ikea and Mio were selected, because they play a very important role within the Swedish furniture retail industry due to the fact that they are the two biggest when it comes to market shares. Furthermore, the suppliers Bitc Möbel AB, Lundbergs Möbler and AB Wilo were chosen in order to examine their dyadic relationship with Mio. For the purpose of investigating the supplier development within the dyadic relationship of Ikea and its supplier, Bodilsen a/s was interviewed. Almost during the whole research of this thesis a lack of knowledge occurred. It was noticed that only few references exist regarding this topic, therefore the objective of this thesis was to attach importance to this issue, illustrate further problem areas and possible solutions. Hereby, a conceptual model was created that served as a basis for the empirical part. After collecting empirical data, a close analysis was accomplished. In the end, suggestions for companies to improve their supplier development were made and a final model was generated in order to illustrate the results of the study. The Swedish furniture retail industry is exposed to a strong price pressure and stress of competition, which makes it necessary to improve companies’ performance in order to withstand the competition and to succeed in the end. Its proximity to end customers makes a continuous product development necessary, which can only be successful when working closely together with manufacturers. Therefore, deploying supplier development is a recommendable strategy, but one should be aware of challenges that can occur. The results of this thesis provide support for the improvement of supplier development, especially when it comes to problem areas and correspondent solutions within dyadic relationships. Supplier development is an up-to-date topic and plays a crucial role within the fast changing business environment. It was chosen to raise the reader’s interest and to give an insight into current economic developments. The Swedish furniture retail industry turned out to be very interesting for the topic of this Master Thesis. Finally, there is nothing more to say than: ‘Enjoy the trip through the Swedish furniture industry!’