Cooperation in the distribution channel : Determinants of inter-organisational cooperation between suppliers and servicing dealers in the Swedish outdoor power equipment market

University essay from Högskolan i Jönköping/IHH, Företagsekonomi; Högskolan i Jönköping/IHH, Företagsekonomi; Högskolan i Jönköping/IHH, Företagsekonomi

Abstract:

Background:

For manufacturing suppliers, careful handling of business relationships with dealers is an essential function required for business success. End consumers rely on dealers for product information, advice and after sales support; all of which being factors capable of enhancing their perceived value of the product. The importance of the dealers for the end consumers implies that it is in the interest of suppliers to manage their relationship with the dealers in a satisfactory manner in order of gaining their support and commitment. In the case of suppliers in the Swedish market for outdoor power equipment, managing this relationship with servicing dealers is of great importance to their business success and viability. Successful management of such relationships requires coordination and cooperation. Thus, it is in the interest of suppliers to understand how long-term cooperation with dealers can be enhanced.

Purpose:

Our research focuses on identifying determinants that enhance sustainable cooperation between manufacturers and servicing dealers in the Swedish outdoor power equipment market.

Method:

A survey was conducted among servicing dealerships in Sweden testing eight hypotheses developed through an adaption of Morgan and Hunts’ (1994) Commitment-trust theory together with an extensive literature review. The results were ana-lysed and tested with correlation analysis.

Conclusions:

Trust and commitment were found to be determinants in fostering sustainable cooperation between dealers and manufacturers in the Swedish market for outdoor power equipment. Furthermore, four important antecedents for dealer commitment were identified; supplier commitment, support, termination costs and participation. Whereas, communication was found to be an important precursor for trust.

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