B2B Relationship Underpinnings of Outsourcing

Author(s): Rajan Varadarajan

Excerpt from the Handbook of Business-to-Business Marketing (Edited by Gary L. Lilien, Distinguished Research Professor of Management Science, The Pennsylvania State University and Rajdeep Grewal, Kenan-Flagler Business School, University of North Carolina, US). Complete book available at https://www.e-elgar.com/shop/handbook-of-business-to-business-marketing.

Firms often enter into strategic alliances (also a B2B relationship) with firms in other industries operating in the same stages of the value chain. These firms, which historically have not been suppliers, customers or competitors of the focal firm, are called ‘collaborators’. This chapter specifically focuses on B2B relationships in the realm of outsourcing, a long-standing business practice that spans multiple organizational functions. The chapter covers selected theoretical perspectives on outsourcing, outsourcing relationships between a focal firm/business and its suppliers, customers, competitors, and collaborators, the role of outsourcing in achieving competitive cost advantage and differentiation advantage, and governance issues.
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