Securing business-to-business relationships: The impact of switching costs

Blut, Markus; Evanschitzky, Heiner; Backhaus, Christof; Rudd, John M.; Marck, Michael

doi:10.1016/j.indmarman.2015.05.010

Cited by 53 publications

(44 citation statements)

References 38 publications

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“…In the B2B relationship, some complex industries need a commitment from the customer since it requires investment to support product and service applications, as in computer systems, manufacturing equipment, telecom equipment, and medical devices (Stender & Ritz, 2006). A related complex industry is chemical products and solutions, where supporting equipment investment is necessary (Blut, Evanschitzky, Backhaus, Rudd, & Marck, 2016). In a B2B chemical industry study, Blut et al (Blut et al, 2016) test hypotheses and a model that separately observe switching cost and satisfaction to ensure that the observed repeat purchase is influenced more by relational switching costs instead of satisfaction.…”

Section: Social Bondmentioning

confidence: 99%

“…A related complex industry is chemical products and solutions, where supporting equipment investment is necessary (Blut, Evanschitzky, Backhaus, Rudd, & Marck, 2016). In a B2B chemical industry study, Blut et al (Blut et al, 2016) test hypotheses and a model that separately observe switching cost and satisfaction to ensure that the observed repeat purchase is influenced more by relational switching costs instead of satisfaction. From this study, it seems that firms need to ensure that customers stay because of developed interpersonal bonding rather than high switching costs.…”

Section: Social Bondmentioning

confidence: 99%

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Perceived Value, Social Bond, and Switching Cost as Antecedents and Predictors of Customer Loyalty in the B2B Chemical Industry Context: A Literature Review

Samudro¹,

Sumarwan²,

Yusuf³

et al. 2018

IJMS

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Industries have been emphasizing customer loyalty to ensure business sustainability. A lot of constructs influence customer loyalty, and this paper focuses on perceived value, social bond, and switching cost. What is actually behind customer’s retention with the firms becomes exciting topics to be explored since firms will employ the best strategy to retain customers, either through offering superior value, investing in a relationship, or in setting up switching costs. This study is designed to develop integrative constructs of customer loyalty and investigates their antecedents using the literature review method. Perceived value tends to be evaluated from an economic benefit perspective since this paper refers to some business practices in chemical industries that concern cost. Purposely, to achieve this economic value, both firms and customers need to work closely, transparently, and cooperatively since the beginning; hence, it needs an interpersonal relationship between parties. With more transferred information from the customer and more transparent communication, firms will be able to identify the customer’s need and deliver tailored superior value. This literature review finds that excellent value and the social bond become financial and relational switching costs for the customer. By understanding antecedents of loyalty, a firm can develop a social bond, superior value, and set up switching costs to create loyalty and build a sustainable business relationship.

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Section: Social Bondmentioning

confidence: 99%

Section: Social Bondmentioning

confidence: 99%

Perceived Value, Social Bond, and Switching Cost as Antecedents and Predictors of Customer Loyalty in the B2B Chemical Industry Context: A Literature Review

Samudro¹,

Sumarwan²,

Yusuf³

et al. 2018

IJMS

View full text Add to dashboard Cite

show abstract

“…On the other hand, high switching costs indicate that the companies believe that the relationship will strengthen in the future. Blut et al (2016) highlight that the interdependency which is induced by high switching cost is the impetus for communication and knowledge transfer between the trading partners.…”

Section: Tce Perspectivementioning

confidence: 98%

“…There is no consensus on the conceptualisation of switching costs (Barroso & Picon, 2012). They can be defined as costs of concluding the ongoing relationship while establishing the relationship with a new business partner (Kim et al, 2010;Blut et al, 2016). The magnitude of switching costs is closely related to the level of specificity of the assets deployed in the relationship.…”

Section: Tce Perspectivementioning

confidence: 99%

Impact of supplier-specific investments in inter-organisational information systems on strategic electronic coordination: the moderation effect of buyer dependence

Teryokhin

Hannås

2018

Engineering Management in Production and Services

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Impact of supplier-specific investments in inter-organisational information systems on strategic electronic coordination: the moderation effect of buyer dependence A B S T R A C T This paper examines the factors which influence sharing of the strategic information (in other words, electronic coordination) in a buyer-supplier dyad. The antecedents of this coordination are examined rather well in the transaction cost economics (TCE) theory and resource-dependency theory (RDT), while the supply chain management perspective is contemplated. The mentioned frameworks are used in the analysis. However, the research focus is narrowed down to the exploration of the antecedents of information exchange conducted via inter-organisational information systems (IOS). The empirical analysis is based on 198 observations of Norwegian companies operating in different types of industries. A regression model is used to test the hypotheses about the antecedents of strategic electronic coordination. The research results indicate that the direct effect of the supplier-specific investments in the IOS on the exchange of strategic information in the buyer-supplier dyad is not statistically significant. The supplier-specific investment in the IOS becomes positively associated with the strategic information exchange in the buyer-supplier dyad only when the buyer is dependent on the supplier. The buyer dependency creates a high motivation for the company to exchange the strategic information with the supplier who is more powerful in the dyad. This research concludes that the companies making substantial investments in the IOS for electronic coordination purposes may not reach their goals if relation-specific factors, such as buyer dependency, are not comprehensively considered.K E Y W O R D S buyer dependency, inter-organisational information system (IOS), resource dependency theory, strategic electronic coordination, specific IOS investment, transaction cost economics (TCE)

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“…New personnel training programmes may be needed in the case of changing a business partner. High switching costs represent a strong bonding mechanism that forces companies to maintain relationships (Geiger et al, 2012;Blut et al, 2016).…”

Section: Transaction Cost Economics (Tce) Hostage Modelmentioning

confidence: 99%

Pre-requisites of successful strategic electronic coordination: the moderation effect of the ownership mechanism of inter-organisational information systems

Teryokhin

Hannås

2017

Engineering Management in Production and Services

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Pre-requisites of successful strategic electronic coordination: the moderation effect of the ownership mechanism of inter-organisational information systems A B S T R A C T In this paper, we attempt to explain how the ownership mechanism of an interorganisational information system (IOS) may impact strategic information exchange (electronic coordination) induced by specific investments in the IOS. Recent research and practice show that heavy investments in IOSs demonstrate mixed results with respect to their impact on the electronic coordination. Consequently, the search of additional factors is needed to help and explain under what circumstances the IOS investments for strategic purposes become beneficial for the companies in a buyersupplier dyad. Transaction cost economics (TCE) and the hostage model are used as a framework for the research. 198 observations of Norwegian companies in different branches of industry constitute the base of the empirical study. A buyer-supplier dyad is the unit of the analysis. A regression model of the relation between the IOS ownership mechanism and the strategic information sharing is used to test two hypotheses about the buyer-supplier collaboration via an IOS. The results demonstrate that the risk of unilateral specific investments in an IOS made by the buyer or the seller is attenuated by the ownership mechanism of the IOS. The willingness of a buyer to share their strategic information with the supplier via the IOS increases if the supplier invests in the IOS which is owned and controlled by the buyer. Conversely, the supplier becomes motivated to share certain sensitive strategic information with the buying company if the latter invests in the IOS which is owned and controlled by the supplier. K E Y W O R D S hostage model, inter-organisational information system (IOS), IOS ownership, specific IOS investment, strategic electronic coordination

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Securing business-to-business relationships: The impact of switching costs

Cited by 53 publications

References 38 publications

Perceived Value, Social Bond, and Switching Cost as Antecedents and Predictors of Customer Loyalty in the B2B Chemical Industry Context: A Literature Review

Perceived Value, Social Bond, and Switching Cost as Antecedents and Predictors of Customer Loyalty in the B2B Chemical Industry Context: A Literature Review

Impact of supplier-specific investments in inter-organisational information systems on strategic electronic coordination: the moderation effect of buyer dependence

Pre-requisites of successful strategic electronic coordination: the moderation effect of the ownership mechanism of inter-organisational information systems

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