Attraction in business relationships. Being an attractive customer as source of competitive advantage

The establishment of tight relations with critical suppliers has become a fundamental source of sustainable competitive advantage in many industries. Nevertheless, changes in the modern economic context produced a shift of the bargaining power in favour of few suppliers. As a consequence, being perceived as an attractive customer emerged as a way to solve this challenge. According to some authors, a firm which is considered attractive by suppliers will benefit of better resource allocation and more favourable treatment compared to non-attractive customers, marking a sustainable competitive advantage. Starting from an in-depth investigation of existing literature concerning attraction in the context of buyer-supplier relationships, this study introduces the concept of “attractiveness” as a further critical element in describing business relationships from the viewpoint of customer companies. Towards this end, a conceptual model describing how such relationships are initiated and developed is proposed. “Why”, “when” and “how” to become an attractive customer are main research questions. The research framework is tested through survey data collected as part of a research project conducted by Politecnico of Milan and other universities in several industries and across 10 countries in Europe and North America (Knoppen et al., 2010). Results demonstrate the correlation between the degree of customer’s attractiveness and supply performance (especially innovation); emphasize such a result in risky supply market situations and for strategic purchasing categories; and highlight characteristics of the supply relationship (e.g. supplier involvement into new product development) as most important elements in influencing the level of customer attractiveness.