Introduction

Abstract

In today’s globalized business markets, established component supplier firms from Germany, Europe, Japan, and the USA must resist strong competitive pressures if they want to remain successful. On the one hand, they are faced with intensifying competition from new players, especially from emerging economies in Asia, who are pushing into the world markets. On the other hand, suppliers are also under huge pressure from their own customers. Many buyers of industrial components have reduced the number of their suppliers by turning towards single sourcing or by inducing competition among a smaller set of component suppliers (Ulaga and Eggert, 2006b). The suppliers are thus forced to compete to attain and defend their positions as key suppliers. However, differentiating an offer has become increasingly difficult in business markets as many buying firms solicit bids on standardized components or require suppliers to design components to their own specifications.