Journal of Purchasing & Supply Management 14 (2008) 170– 179
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Journal of Purchasing & Supply Management
journal homepage: www.elsevier.com/locate/pursup
Cooperating and competing in supply networks: Making sense of a triadic sourcing strategy Anna Dubois Ã, Peter Fredriksson 1
Division of Industrial Marketing, Department of Technology Management and Economics, Chalmers University of Technology, S-412 96 Gothenburg, Sweden
a r t i c l e in f o
Article history: Received 20 June 2007 Received in revised form 15 May 2008 Accepted 18 May 2008 Keywords: Sourcing strategy Triads Cooperation Competition Supply networks
a b s t r a c t
This paper introduces the concept of a ‘‘triadic sourcing strategy’’. Triadic sourcing is a way for buying companies to nurture and beneﬁt from cooperation and competition between two suppliers with partially overlapping capabilities. In contrast to hybrid sourcing strategies outlined in the literatureparallel and network sourcing—the distinctive feature of triadic sourcing is that the buyer actively creates interdependencies between two suppliers. To illustrate this principle and the characteristics of triadic sourcing, Volvo Cars’ use of two suppliers of seats is described. The paper asserts that triadic sourcing is a dynamic sourcing strategy that contributes to efﬁciency and innovation for the buyer and the two suppliers, together forming a triad that is subject to ﬁrm interdependence and network embeddedness. & 2008 Elsevier Ltd. All rights reserved.
1. Introduction Sourcing strategies have been on top of the agenda in the area of industrial purchasing for a long time (Kraljic, 1983; Gadde and ˚ Hakansson, 1993; Ellram and Carr, 1994; Cousins and Spekman, 2003; Day and Lichtenstein, 2006; Ventovuori, 2006). In view of developments towards reducing the numbers of suppliers and increasing the content in the relationships with the remaining ones (Cousins, 1999; von Corswant and Fredriksson, 2002; ¨ ¨ Kemppainen and Vepsalainen, 2003; Sarkar and Mohapatra, 2006), the pros and cons of single and multiple sourcing have been debated and reviewed (see for example Lamming et al., 2000; Helper, 1991; Richardson, 1993; De Toni and Nassimbeni, 1999; Zeng, 2000). In addition to these ‘‘extreme’’ forms of sourcing strategies, hybrid forms such as ‘‘parallel sourcing’’ (Richardson, 1993) and ‘‘network sourcing’’ (Hines, 1995, 1996) have been proposed. These aim at combining the beneﬁts of single and multiple sourcing, by allowing for competition between suppliers, while also maintaining cooperation between the buyer and each supplier, respectively. The aim of this paper is to introduce another and different hybrid sourcing strategy: ‘‘triadic sourcing’’. Triadic sourcing is a way for buying companies to nurture and beneﬁt from
cooperation and competition between two suppliers with partially overlapping capabilities. In contrast to the hybrid strategies of parallel and network sourcing, the distinctive feature of triadic sourcing is that the buyer actively creates and encourages interdependencies between two suppliers. The triadic sourcing strategy hence relies on the assumption that companies may beneﬁt from interdependencies to other actors. To illustrate the assumptions and the key aspects of triadic sourcing, the case of Volvo Cars’ sourcing of seats is presented. This exemplary case shows how a buying company can foster a creative tension between cooperation and competition between two interdependent suppliers through a sophisticated and dynamic division of labor between them. The next section presents a literature review of parallel and network sourcing and the basis for triadic sourcing. Thereafter, the case is presented. Triadic sourcing is then deﬁned as a sourcing strategy, followed by managerial implications for buyers and suppliers.
2. Hybrid sourcing strategies 2.1. Parallel and network sourcing Parallel sourcing...