C1 – Long-Term Relationship Evolution

Project status definitely finished
Project time 01.01.2019- 31.12.2021
Funding source DFG - Individual Grants Programme
Project number KR 1619/10-1
Keywords business models; marketing; business administration

This project focuses on the evolution of the relationship between the provider and the customer of a value-creating offer. Long-term business relationships are particularly suitable for value-centred business models from a transaction cost theory perspective. On the one hand, these models require that cooperation partners adapt to each other's needs and therefore conduct relationship-specific investments. These investments often only pay off in long-lasting relationships. On the other hand, higher cooperation levels lead to more uncertainty, because firms are directly influenced by their relationship partners' performance and grant more of their autonomy. Within ongoing relationships, this uncertainty can be reduced, because both partners learn about the counterpart's performance and behaviours over time. Thus, value-creating sales are enhanced in long-term business relationships.Value-centred business models can be highly complex, making it impossible to cover all major possible eventualities. Monitoring and control structures can be associated with substantial costs and can create an entry barrier for value-centred business models. A leap of faith may represent an alternative to formal control mechanisms. Nonetheless, the required integration of the provider and the customer in value-centred business models means that both parties have limited opportunities to gradually build their relationship and the required leap of faith induces substantial uncertainty for both parties.Many studies have treated relationships as temporally homogeneous, ignoring that relationships evolve over time and respond differently to relationship marketing activities. Such a conceptualisation often insufficiently explains how relationships evolve in value-creating offers, for which providers often deeply integrate with customers, and become a permanent part of their customers' value chains. Thus, we will investigate the following research goals:- We identify strategies that foster relationships before value-creating offers are made and implemented.- We seek to identify what determines an optimal implementation of a value-creating offer while relationships evolve.- We examine measures that support firms to identify further value-creating activities after the implementation of value-creating offerings.In order to conduct our research, we will examine supplier-customer relationships over time. Therefore, we will conduct a panel, which is based on insights from a qualitative pre-study. Further, we will use data on these relationships from the customer databases of our cooperation partners. After merging the data we will model relationships and their development over time in the context of value-centred business models. While managers gain insights on how to make their product-centred relationships become value-centred or how to intensify value-centred relationships, scholars will learn about the interplay of relationships dynamics and value-centred business models.