Initiation of business relationships

Abstract

This thesis investigates the initiation process of business relationships to customers, which is a key issue for all selling firms. We address the topic by considering newly and well-established firms and their strategy regarding this initiation process. To get a deeper understanding, we have conducted a case study of three newly and three well-established firms. To answer the research question of this thesis a Theoretical Framework is made, based on a literature review, in order to study sub-processes of the initiation process and the initiation strategy in detail. We have found some clear differences, regarding both the initiation strategies and the initiation process, between the newly and well-established firms studied. Both newly and well-established firms seemed to have planned-emergence as part of their intended initiation strategy, but for different reasons well-established firms planned in more detail based on experiences from previous relationships. On the other hand, the newly established firms had less detailed plans and were more or less forced to seize opportunities that emerge as a result of a planned-emergence strategy. Both types of firms initiated business relationships to customers that were not closely located. Well-established firms had developed a reputation and established references. This was less obvious for newly established firms who needed to utilize their personal reputation and network, and external agents most often connected them to new business customers. There were similar patterns of negotiation and establishing of agreement between newly and well-established firms. Based on our interpretation of the complexity of strategy formation, both newly and well-established firms had a high degree of deliberate elements in their realized initiation strategy. For all the case firms studied, the sub-processes in the initiation elapsed in flexible successions, and we therefore suggest that the state theory should be used in further research of the initiation process of business relationships to customers.