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Keywords Management, Portfolio management, Networks, Business-to-business marketing
Abstract The importance of effective planning and management of an organization's array of customer and supplier relationships is self-evident, yet relatively little research has been published which develops our academic or managerial understanding of the conceptual and practical problems inherent in this issue. This paper is written from an interaction and network perspective and critically reviews existing customer and supplier portfolio analysis and considers the implications of using such an approach for the management of relationships. The notion of relationship portfolios in the context of network theory is reviewed and the authors suggest that portfolios provide an alternative method of network conceptualization and analysis and that such portfolios may be a key factor in successful relationship management.
Portfolio analysis and management make a major contribution
Introduction
Recently the development and management of relationships has become a central focus of much marketing research and conceptualization based on the realization that both customers and suppliers are valuable assets of a firm (Cunningham, 1982; Cunningham and Homse, 1982). Customer and supplier relationships have attracted a great deal of attention from a wide range of perspectives, including business-to-business marketing, supply chain management, services marketing and, more recently, consumer product marketing (Hakansson, 1982; Gronroos, 1983; Turnbull and Valla, 1986; Dwyer et al., 1987; Gummesson, 1987, 1999; Frazier et al., 1988; Ford 1990, 1997; Ford et al., 1998; Morgan and Hunt, 1994; Moller and Wilson, 1995). Many practitioners are now operationalizing the concept by implementing key or global account management, nominating preferred suppliers or even introducing relationship management schemes. Yet the selection of key accounts, preferred suppliers and key relationships can be problematic and this is where portfolio analysis and management make a major contribution to management.
An implicit assumption, however, of much of this work is that having "strong" customer or supplier relationships is necessarily "good". When this assumption is stated explicitly it is immediately and obviously not so -- as any production, sales or customer account manager knows. Some customers, even large ones, are just not worth having; they are difficult to satisfy, are too demanding and/or will not pay a "fair"...