Supplier involvement and dealer satisfaction: implications for enhancing channel relationships

Suppliers use a variety of strategies to gain a preferred position within their dealers′ supply network. Dealers allocate purchases among several suppliers in order to maximize benefits from their suppliers′competitive maneuvers and to avoid being dominated. Uses an extension of transaction cost analysis and contract law to provide empirical insight into supplier‐dealer relationships within dealers′ supply networks. Also suggests simple but powerful mechanisms for suppliers to enhance relationship strength.