Power and interdependence in buyer supplier relationships: A purchasing portfolio approach

Summary Kraljic's purchasing portfolio approach has inspired many academic writers to undertake further research into purchasing portfolio models. Although it is evident that power and dependence issues play an important role in the Kraljic matrix, scant quantitative research has been undertaken in this respect. In our study we have filled this gap by proposing quantitative measures for ‘relative power’ and ‘total interdependence’. By undertaking a comprehensive survey among Dutch purchasing professionals, we have empirically quantified ‘relative power’ and ‘total interdependence’ for each quadrant of the Kraljic portfolio matrix. We have compared theoretical expectations on power and dependence levels with our empirical findings. A remarkable finding is the observed supplier dominance in the strategic quadrant of the Kraljic matrix. This indicates that the supplier dominates even satisfactory partnerships. In the light of this finding future research cannot assume any longer that buyersupplier relationships in the strategic quadrant of the Kraljic matrix are necessarily characterised by symmetric power. 1 Marjolein C.J. Caniëls, Open University of the Netherlands (OUNL), Faculty of Management Sciences (MW), P.O. Box 2960, 6401 DL Heerlen, the Netherlands. Tel: +31 45 5762724; Fax: +31 45 5762103 E-mail: [email protected] 2 Cees J. Gelderman, Open University of the Netherlands (OUNL), Faculty of Management Sciences (MW) P.O. Box 2960, 6401 DL Heerlen, the Netherlands. Tel: +31 45 5762590; Fax: +31 45 5762103 E-mail: [email protected]