Why relationships do not fit into purchasing portfolio models—a comparison between the portfolio and industrial network approaches

Abstract

Purchasing portfolio models have received a great deal of attention during the last two decades. The simplicity of application and the focus on power-dependence balancing has been appreciated by practitioners and academics alike. In this paper we argue that using ‘given’ products as a port of departure, in addition to a dyadic perspective on purchasing management, may be counterproductive where purchasing efficiency is concerned. First, the object of exchange is not ‘given’ when firms interact, but may be subject to continuous joint development. Second, the dyadic perspective may obscure potentials for enhancing productivity and innovativeness since both parties have other relationships that impact on the collaboration between them.