Some suppliers, by becoming reliant on the extensive technical support and market
information provided by their large customers, have allow themselves to become even
more dependent upon their customers than the value of their sales might suggest.
Furthermore, some large customers have increased their suppliers’ dependence on
them by making the continued placing of orders with a supplier dependent on that
supplier not seeking orders from their competitors. For example, Marks and Spencer
made it clear to Baird (one its long-term suppliers) that it could not also supply its
competitors (Baird Textile Holdings Limited and Marks and Spencer 2001, p. 3).
Unless a supplier knows of another customer from which it believes it can quickly
obtain business at an acceptable level of profit, then in the short-term “exit” is not
a real option from amongst the alternatives of “exit, voice or loyalty” (Hirschmann
1970)3
. Indeed if it is assumed that a firm wishes to continue to exist, then ‘exit’ may
not be a possibility and a firm may have no alternative but to remain a supplier to