Purpose -Strategic concentration is a key issue for manufacturing companies when designing a supply chain. As a corporate strategy and a supply chain governance strategy, vertical integration relates to organisational economics and strategic supply chain management. Numerous explanations have been created for vertical integration, and transaction cost economics (TCE) provides a theoretical basis to help understand the process. However, the current popularity of vertical integration seems inspired by something more than altering industry structure and minimising cost, which are the traditionally accepted explanations for vertical integration This paper aims to explore the driving forces for vertical integration, particularly downstream integration of distribution, and the consequences of vertical integration in a manufacturer-distributor-reseller chain. Design/methodology/approach -This study adopted an exploratory case study approach to examine a Swedish-based timber manufacturer that vertically integrated a distribution centre in the UK, which made it a direct supplier to DIY retailers and builders' merchants. Data were collected primarily through open-ended, face-to-face interviews. Findings -The study found that the most important factors driving the manufacturer's vertical integration of distribution were the demands of large retail chains and the manufacturer's decisions to focus on developing its positioning strategy in the supply chain. Vertical integration has transformed the manufacturer into a supplier to large timber products resellers, offering the firm a greater potential to provide integrated solutions and, therefore, become a strategic partner to its customers. Originality/value -This empirical study examined a building material distribution channel, a subject that has rarely been studied. Study results add empirical evidence to explanations and impacts of vertical integration, especially the integration of customer interface.

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Purpose-This paper aims to investigate an underexplored aspect of outsourcing involving a mixed strategy in which parallel production is continued in-house at the same time as outsourcing occurs. Design/methodology/approach-The study applied a multiple case study approach and drew on qualitative data collected through in-depth interviews with wood product manufacturing companies. Findings-The paper posits that there should be a variety of mixed strategies between the two governance forms of "make" or "buy." In order to address how companies should consider the extent to which they outsource, the analysis was structured around two ends of a continuum: in-house dominance or outsourcing dominance. With an in-house-dominant strategy, outsourcing complements an organization's own production to optimize capacity utilization and outsource less cost-efficient production, or is used as a tool to learn how to outsource. With an outsourcing-dominant strategy, inhouse production helps maintain complementary competencies and avoids lock-in risk. Research limitations/implications-This paper takes initial steps toward an exploration of different mixed strategies. Additional research is required to understand the costs of different mixed strategies compared with insourcing and outsourcing, and to study parallel production from a supplier viewpoint. Practical implications-This paper suggests that managers should think twice before rushing to a "me too" outsourcing strategy in which in-house capacities are completely closed. It is important to take a dynamic view of outsourcing that maintains a mixed strategy as an option, particularly in situations that involve an underdeveloped supplier market and/or as a way to develop resources over the long term. Originality/ value-The concept of combining both "make" and "buy" is not new. However, little if any research has focused explicitly on exploring the variety of different types of mixed strategies that exist on the continuum between insourcing and outsourcing.

Design/methodology/approach: The study develops a conceptual framework of nine propositions (and corresponding diagrammatic representations) of the relationships between: (i) three kinds of risk (operational, strategic, and financial); and (ii) three strategies for the provision of added service (customisation, bundling, and broadening the range of offerings).This conceptual framework is examined empirically by qualitative analysis of data gathered in a three-year longitudinal study of managerial representatives from nine multinational manufacturing firms engaged in the addition of services to their traditional goods offerings. Findings:Eight of the nine propositions are fully supported, and one receives equivocal support. In addition, several contextual factors are identified as moderating influences on the relationships between the three categories of service offering and the three classes of risk. Research implications:The study provides an original conceptual framework and nine research propositions that represent a useful starting point for the development of a formal theory of the risks of providing services. Practical implications;The conceptual framework provides guidance for managers' assessments of the risks accompanying the infusion of added services to the traditional goods offerings of manufacturing companies.Originality/value: This paper provides a novel conceptualisation of service innovation and attendant risk.

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Purpose -Key account management (KAM) programmes are a way for companies to develop existing relationships and increase sales, thus being proactive and searching for opportunities (which is often expected of KAM). It is also a way to meet changing customer demands arising from changes in purchasing strategy, buyers' mergers and acquisitions and the search for synergies in order to reduce costs. The purpose of this article is to analyse different key account management programmes on how they manage the sales process complexity and customer expectations. Design/methodology/approach -The paper draws on qualitative data collected during a field study of ABB and six of their major customers, based on annual or biannual interviews with 50 individuals within ABB from 1996 to 2006 and three to ten individuals from each of the customers. Interviewees included corporate managers, key account managers and sales personnel/project managers. The customers involved in the study belonged to mining, automotive, process equipment manufacture, building technology, energy production and telecommunication sectors. Findings -In this study three different programmes are identified and analysed: the proactive programme -which is driven by sales opportunity; the reactive programme -which is driven by customer demands; and the organisation-based programme -which is driven by the belief in customer-centric organisational units. Practical implications -The paper identifies sales aspects (complexities) of KAM programmes that are handled in different ways by different types of programmes. Originality/value -With an empirical base the paper provides a basis for understanding the reasons behind the establishment of several KAM programmes in the same corporation.

Increasing globalisation creates new possibilities for sourcing from low cost countries (LCC), but also comes with a range of logistics challenges and issues to be dealt with. The purpose of this paper is to investigate how logistics and its impacts are considered in LCC sourcing decisions. An exploratory multiple case study of industrial product companies engaged in distant LCC sourcing serves as an empirical base. Findings reveal that firms do not explicitly take logistics into account during LCC sourcing decisions. Even if logistics is considered, it is generally in a reactive way and takes a transactional cost focus. Instead, we propose a framework to proactively consider logistics factors in the early stages of LCC sourcing. This is done through identifying product and supplier related logistics factors and their impact on pre-transaction, transaction and post-transaction elements in the Total Cost of Ownership model.

Purpose: The purpose of this paper is to consider how value can be better defined and to understand the drivers of value appropriation in business relationships. In doing so, we explore the role that power plays in determining the sharing of value in those relationships.Design/methodology/approach: A conceptual discussion about value and the appropriation of value in business relationships, which leads to the development of a methodology for assessing the sharing of value.Findings: In this paper we have developed our view of total value in supply chain relationships. We argue that the value of the relationship is the sum of the customer and supplier value, including both tangible and intangible benefits and sacrifices. In addition, we maintain that the appropriation of value in a business relationship is reliant upon: 1) the power both parties possess; 2) the direct and tangible value each party has to offer; and, 3) the indirect and intangible value that each has to offer. We also provide a methodology, which can be used to determine the sharing of value between two actors within a business exchange. Research limitations/implications:In arriving at our conceptualisation of total value and in our discussion of value appropriation in business relationships, we drew upon extant literature. However, a limitation is that we were unable to fully consider all the academic discourse centred on value and value appropriation.Originality/value: The discussion brings together the issues of customer value and supplier value to the concept of 'total value'. Thereafter, it links the contentious issue of buyer and supplier power, so as to better understand the appropriation of value in business relationships.2