Dyadic Adaptation in Business-to-Business Markets

Abstract

Competitive success in business-to-business markets often depends upon the ability of the firm to adapt specifically to the needs of a single customer organization. Research into buyer-seller relationships in industrial markets has shown that both buying and selling firms implement specific adaptations for a single partner. Adaptation can take place at the level of the product or more broadly in terms of management processes, information exchange, and even organizational restructuring. The paper develops an improved taxonomy for dyadic adaptation in business-to-business markets, and explores the driving forces behind relationship-specific adaptation. Adaptation by supplier firms is found to be more frequent than adaptation by buyers. Supplier adaptation is driven by relative power, buyer support, and by the managerial preferences of the two firms for a more or less relational form of exchange. Several managerial implications and avenues for further research are discussed