Business Intelligence

The Internal Competitor: Buyer Motives And External Supplier Marketing Strategies

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Executive Summary

The purpose of this paper is to identify buyer motives for supporting internal competitors and to suggest relevant marketing strategy elements for external suppliers confronting these internal competitors. With basis in a literature review the authors identify different buyer motives for choosing to combine external suppliers with internal production, i.e., an internal competitor. For each buyer motive, possible marketing strategies are identified and briefly discussed. The paper describes different buyer motives for choosing dual sourcing by combining internal production and external suppliers. Central buyer motives are to avoid idle production capacity, to avoid quality debasement and cheating, to avoid unreliable suppliers and hold-up problems, to avoid inefficient problem solving, and to access technologies and capabilities.

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