BREXIT’S EFFECT ON BUYER-SUPPLIER RELATIONSHIPS

BREXIT’S EFFECT ON BUYER-SUPPLIER

RELATIONSHIPS

BACHELOR THESIS

THESIS WITHIN: Business Administration NUMBER OF CREDITS: 15 ECTS

PROGRAMME OF STUDY: International Management AUTHOR: Agnes Olsson Löwerot & Noora Ustav TUTOR: Oskar Eng

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Acknowledgments

We would like to thank everyone who has helped and encouraged us throughout this challenging and rewarding process. Without their support, this thesis would not have been possible.

Firstly, we would like to thank our tutor Oskar Eng, for helping us through this journey and always being there for us to give feedback and challenge our perspectives. We would also like to thank our seminar group for their valuable feedback and support.

Secondly, we would like to thank all the companies and participants for the time and engagement given to our thesis and for helping us finish this thesis.

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Bachelor Thesis in Business Administration

Title: Brexit’s Effect on Buyer-Supplier Relationship Authors: Agnes Olsson Löwerot & Noora Ustav Tutor: Oskar Eng

Date: May 2020

Key terms: Brexit, Buyer-Supplier Relationships, Bensaou portfolio model, Captive buyer,

Captive supplier, Market Exchange, Strategic Partnership

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Abstract

Background: Business relationships between buyers and suppliers are of great importance to

maintain a profitable and beneficial business environment. Every organization’s relationship characteristics vary and are influenced by various factors, including environmental conditions and competitors in the market. Also, Brexit is an event that brings uncertainty to these

relationships. It is unknown how Brexit will affect the business environment and it is, therefore, necessary to investigate Brexit’s effect on buyer-supplier relationships. The research of Brexit could contribute with valuable insights for both companies and policymakers since it will demonstrate the way Brexit has influenced buyer-supplier relationships and companies' responses to the event.

Purpose: The purpose of this paper is to examine the relationships between buyers and

suppliers in the EU and the British market under the effect of Brexit. The supplier-buyer relationship will be focused on EU buyers and British suppliers, which will illustrate the adaptations and changes companies in the EU are facing regarding their relationships. Further on, the relevance of this paper will be highlighted through the long-debated case of Brexit.

Method: The research is a qualitative study that follows a case study frame of logic. Data has

been collected through semi-structured interviews with a sample of three individuals with a purchasing background. The empirical findings were analysed through a logic of thematic analysis using the Bensaou (1999) buyer-supplier relationships portfolio model as an analysis tool.

Conclusion: The analyses have found that there is no change experienced in the current

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influence on their cost in the future which then may affect their product category. Otherwise, the EU buyers have not changed their outlook on their UK suppliers because of Brexit and for the time being continue their business as usual.

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Table Of Content

1. Introduction... 7 1.1. Problem ... 7 1.2. Purpose ... 8 1.3. Perspective ... 9 1.4. Delimitation ... 9 2. Literature Review... 10 2.1. Relationship Theory ... 10 2.1.1. Relationship Terminology ... 10 2.1.2. Theoretical Models... 11 2.1.3. Bensaou Model ... 13 2.1.3.1. Captive Buyer ... 14 2.1.3.2. Captive Supplier ... 15 2.1.3.3. Market Exchange ... 16 2.1.3.4. Strategic Partnership ... 17 2.2. Situation Analysis ... 18

2.2.1. Brexit and European Union ... 19

3. Methodology ... 21 3.1. Research Philosophy ... 21 3.2. Research Approach ... 21 3.3. Research Method... 22 3.4. Data Collection ... 23 3.4.1. Sampling ... 23 3.4.2. Primary Data ... 23 3.4.3. Secondary Data ... 24 3.4.4. Interview ... 25 3.5. Ethical Consideration ... 26

3.5.1. Research Design, Data Collection, Analysis ... 26

3.5.2. Trustworthiness ... 27 3.6. Data Analysis ... 28 4. Empirical Findings ... 29 4.1. Interview A ... 29 4.2. Interview B ... 33 4.3. Interview C ... 34 5. Analysis... 39 5.1. Bensaou Model ... 39

6 5.1.1. Captive Buyer ... 39 5.1.2. Captive Supplier ... 41 5.1.3. Market Exchange ... 43 5.1.4. Strategic Partnership ... 45 5.2. Brexit ... 47

5.3. Results Of The Analysis ... 49

6. Conclusion ... 51

7. Discussion ... 52

7.1. Implications And Contributions ... 52

7.2. Limitation ... 53

7.3. Future Research ... 53

8. Reference ... 55

Appendix A - Methodology Flow Chart ... 59

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1. Introduction

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This chapter aims to present the topic of Brexit and business relationships. Firstly, the problem and purpose of the thesis will be introduced, give an overview of the research topic, and the importance of the study. The research question will then be presented, along with the authors chosen perspective and identified delimitations of the topic.

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1.1.

Problem

In today's global business environment, relationships between buyers and suppliers are crucial for the businesses’ survival and success (Parise & Casher, 2003). These relationships have been argued to be a source of competitive advantage (Langfield‐Smith & Greenwood, 1998; Spekman et al., 1998) especially, in circumstances where the organization itself can leverage parts of the operation into a competitive advantage (Kannan & Tan, 2006). Many businesses are also often dependent on their business relationships, such as buyers on their suppliers. If those critical suppliers fall through and fail to deliver products, components, or information as agreed, organizations might not be able to conduct their operation and deliver value to their customers and in turn, make a profit (Ruiz-Torres & Mahmoodi, 2006). But by creating suitable relationships with key suppliers, organizations can avoid those issues and instead experience benefits such as quality and product improvement as well as reduced costs (Kannan & Tan, 2006).

Not one type of relationship is suitable for all situations and organizations, instead, the desired type of relationship is dependent on several factors (Ellram & Cooper, 1990) and Svensson (2004) also emphasizes the importance of being able to establish an appropriate type of relationship with suppliers. Factors that are commonly mentioned to affect the relationship are environmental conditions (Lawrence & Lorsch, 2007), the number of suppliers available (Chelariu & Sangtani, 2009) and the importance of the product supplied (Svensson, 2004). Mentzer et al., (2000) also add that environmental uncertainty puts

pressure on business relationships which is an important factor in our everchanging business environment.

Furthermore, a current event that has caused and will continue to cause environmental uncertainty for many companies is Brexit, United Kingdom’s exit from the EU. The

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relationship between the United Kingdom (UK) and European Union (EU) has become constrained and the two have been working towards an agreement of a deal for several years, without success. If a deal has not been reached by the end of 2020, the rules and regulations of the World Trade Organizations (WTO) will go into effect. This would entail tariffs on both exported and imported goods, as well as, custom border for the movement of people,

resulting in extensive changes for a business who operates cross-border of EU and UK or have suppliers in either one of the areas (Alon Eisenberg, 2020). Other possibilities that have been illustrated by researches are the “Norway model” which would imply a free movement of people, goods, and capital between EU and the EEA countries (Dhingra & Sampson, 2016; Suzie Cave, 2016).

However, regardless of the outcome of the agreement, the situation causes a great deal of uncertainty that businesses must take into consideration. The future deal can either come to cause difficulties, greatly improve or perhaps not have an effect at all for companies in how they deal with a cross-border relationship. As seen that the future is unknown and despite lots of research regarding the possible outcomes, it has shown that no one scenario has been believed to have overpowering odds to become reality (Dhingra & Sampson, 2016; Henökl, 2018; House of commons Library, 2019).

This topic could be important for both companies and policymakers since it will show the reaction companies have had towards Brexit and how this has affected buyer-supplier relationships. The uncertainty of Brexit has already shown an impact on the business

environment. Regardless of what happens with the final agreement between the UK and EU, it will have a profound effect on how companies conduct business in the future. Moreover, Brexit is an important factor in the buyer-supplier relationship which in turn is a contributing factor to the success or failure of a business (Parise & Casher, 2003).

1.2.

Purpose

The purpose of this paper is to examine the relationships between buyers and suppliers in the European Union and the British market under the effect of Brexit. The supplier-buyer

relationship will be focused on EU buyers and British suppliers, which will illustrate the adaptations and changes companies in the EU are facing regarding their relationships. Further on, the relevance of this paper will be highlighted through the long-debated case of Brexit, as it is a current event that already has influenced business relationships and will continue to do so in the future. Our thesis will explore the relationships between buyer-suppliers and

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investigate if any changes have appeared in the light of Brexit. Therefore, the following research question was developed:

What effect has Brexit had on the characteristics of buyer-supplier relationships between European and British companies?

1.3.

Perspective

The thesis aims at exploring the effect Brexit has had on buyer-supplier relationships,

specifically, buyers from EU countries with suppliers in the UK. Therefore, the subject matter is buyer-supplier relationships, which are being examined in the case of the event of Brexit. Furthermore, the research will be conducted by the European buyer’s perspective. The reason for not choosing a dyadic approach in examining the relationships from both the supplier and buyer’s view is because of the benefits of focusing on a narrower view. By focusing on one specific view, all resources can be used towards the chosen perspective and the researchers can dedicate the time and resources available solely to the buyer’s perspective data collection, and therefore, collet a richer and larger data which will yield a more in-depth result.

1.4.

Delimitation

To analyse the buyer-supplier relationship it has been narrowed down to specific characteristics. It is necessary to state that there are other characteristics to describe

relationships but due to the decision to use the Bensaou (1999) relationship model the other characteristics were found irrelevant to this study. In the buyer-supplier relationship the perspective has been limited to buyers’ view, which allows the study to go more in-depth and generate a deeper understanding of the topic. From the population of European companies, a sample from Sweden and Estonia was selected. The sample choice was made due to the convenience and accessibility of the data.

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2. Literature Review

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The objectives of this chapter are to present a theoretical background to the topic of business relationships theory and the different techniques and models used by other researchers. The relationship portfolio model by Bensaou (1999) will then be presented as the literature chosen to analyse the collected data which will be introduced in future chapters.

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2.1.

Relationship Theory

Oftentimes expressions such as relationship, cooperation, and partnership are used interchangeably without distinguishing between the different expressions’ meanings. However, the definitions of these three words are not the same in the context of business relationships (Mohr & Spekman, 1994). In this report, the word relationship will be used to cover the broader aspect of all types of relationships between two parties, both in business and other contexts. While expressions such as partnership, cooperation, collaboration will be used to explain types of business relationships with different characteristics.

Relationships between companies are widely researched and shown to be a broad topic that includes different perspectives, variables, and definitions (Bensaou, 1999; Ellram &

Hendrick, 1995; Holmlund, 2004; Knemeyer et al., 2003; Kraljic, 1983; Spekman et al., 1998). It was further found that the definitions of the term relationship, when referring to a relationship specifically between businesses, differs between authors. However, the different explanations and definitions all shared the underlying assumption that business relationships are based on repeated interaction between two parties. Further on, despite the topic of business relationships being well researched, little conclusions have been made from the literature. Instead, many authors built upon existing models and literature to then create new definitions and factors as a contribution to the literature. The constant additions of new models and definitions make it difficult to evaluate the vast literature that exists of the different relationship models (Duffy, 2008; Holmlund, 2004; Johnsen et al., 2008).

2.1.1.

Relationship Terminology

In existing relationship literature, multiple authors use synonyms to define the relevant key terms (Cravens et al., 1993; Golicic et al., 2003). Also, relationship continuum and the types

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of it vary from author to author (Mason et al., 2007). For example, Wagner & Johnson (2004) illustrated through Thorelli (1986) and Dwyer et al. (1987) work that relationships can cover a spectrum from markets to hierarchies or from arm’s length to a collaborative relationship. Spekman et al. (1998) add to this with his model which covers relationship scope from open market negotiation to collaboration. Even though the authors, such as Spekman et al. (1998) and Dwyer et al. (1987), use their terminology they share the same description. One end of the spectrum is characterized by singular exchange (Dwyer et al., 1987; Spekman et al., 1998) or short-term relationship (Dwyer et al., 1987) and the other end by a relationship with trust and information sharing (Dwyer et al., 1987; Spekman et al., 1998). Also, relationship types are explained through characteristics rather than through a spectrum (Golicic et al., 2003), as it has been done by Cannon & Perreault (1999) and Rinehart et al. (2004). In addition to relationship continuum (Lambert et al., 1996; Spekman et al., 1998) and

characteristic approach (Golicic et al., 2003), portfolio concept is another way to explore the types of relationships (Bensaou, 1999; Krapfel et al., 1991). The portfolio approach offers a matrix-based view on the relationship literature (Day et al., 2010; Nellore & Söderquist, 2000). Furthermore, the mix of the characteristics used to explain different types of relationships varies throughout the literature. Also, parallel use of phrases to illustrate the divers’ range of relationships is very common, which causes misunderstandings throughout the relationship literature (Cravens et al., 1993; Golicic et al., 2003). For instance, Ellram (1991), Lambert et al. (1996) as well as de Leeuw & Fransoo (2009) uses characteristics such as sharing information and liabilities to illustrate partnership as a type of relationship. On the other hand, authors such as Mason et al. (2007) and Wagner & Johnson (2004) use some of the same characteristics to describe the collaboration. That creates an issue in the literature as the words describing types of relationships could be interpreted in multiple ways (Golicic et al., 2003).

2.1.2.

Theoretical Models

Research on the buyer-supplier relationship has generally been analysed either through a spectrum approach (Vesalainen & Kohtamäki, 2012) or a portfolio approach (Krapfel et al., 1991). The portfolio method is based on a matrix concept (Day et al., 2010; Nellore & Söderquist, 2000) which assist to organize the data in a skillful way (Nellore & Söderquist, 2000) and categorized with the subject in interest (Olsen & Ellram, 1997). Both portfolio approaches (Gelderman & Van Weele, 2003; Kraljic, 1983; Olsen & Ellram, 1997; Wynstra

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& Pierick, 2000) and continuum approach (Dwyer et al., 1987; Lambert et al., 1996; Spekman et al., 1998) has been widely used in the buyer-supplier relationship theory. From the spectrum method, Lambert et al. (1996) model is well used by other studies (Bechtel & Jayaram, 1997; Catalan & Kotzab, 2003; Knemeyer et al., 2003). Lambert et al., (1996) illustrates types of relationships with a spectrum ranging from arm’s length

relationship to vertical integration. The focus of the continuum is on partnerships that are further divided into three subcategories: Type I, Type II, and Type III. The partnerships categories differ from each other by the level of integration implemented between involved parties (Lambert et al., 1996). Different drivers and facilitators are analysed to discover if a partnership would be a suitable option as a type of relationship. In case it is, then the model helps to find a most fitting partnership category (Bechtel & Jayaram, 1997). The model cannot only be used as a mean to evaluate new relationship options but also analyses current relationships (Lambert et al., 1996).

Furthermore, Bensaou (1999) is a buyer-supplier framework that has been generated through theoretical research, which in turn has been built upon empirical research that the author conducted in 1995. The theoretical research in 1999 aims at verifying the findings done in 1995 with the use of a sample of 447 respondents (Vesalainen & Kohtamäki, 2012). The portfolio framework that Bensaou created does not only presents the relationship

characteristics but further gives managerial actions that are suitable to succeed with each relationship. As many authors have mentioned, one relationship type is not preferred in all situations, but many factors affect the type of relationship that will yield the most success for a company (Bensaou, 1999; Olsen & Ellram, 1997; Vesalainen & Kohtamäki, 2012).

However, no type of relationship will be successful if not met with the right style of

management. Bensaou monitored the management style that influenced those who were most successful in each relationship category, therefore, creating a model that can give useful suggestions to the companies in how they should handle certain relationships.

For this study, a portfolio approach by Bensaou has been chosen based on the knowledge and overview gathered from existing literature. It has been determined that this framework would be most suitable for this study. Bensaou portfolio model goes into enough detail to assist in collecting the data and analyzing it in a manner that provides in-depth results. Spectrum approach nor other portfolio models do not fulfill that purpose and therefore are irrelevant for this work.

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2.1.3.

Bensaou Model

Bensaou (1999) designed a portfolio model for buyer-supplier relationships which is based on understanding the external conditions of the company. This portfolio of relationship types was created after investigating 447 managers within the automobile industry from America and Japan. The managers in the chosen sample were sent a survey questionnaire regarding their suppliers and the products of exchange which gave the author comprehensive

information about the specific relationship characteristics and the product. The managers answered questions about the product and its technology, supplier characteristics, competition in the supplier market, the nature of the responsible job, social climate, as well as, the

performance of the relationship. Further on, the information gathered was then categorized into the four types of relationships based on the amount of investment invested from each party; this criterion was shown to strongly correlate with the type of relationship. From these factors and characteristics, he created the four-category model with the four types of

relationships Captive Buyer, Captive Supplier, Market Exchange, and Strategic Partnership (see figure 1). The vertical axis on the relationship portfolio illustrates the buyer’s specific investment. These refer to both tangible and intangible investments done by the buyer to facilitate the relationship and operation with the supplier. These are investments in

equipment, buildings, process customization as well as more intangible investments such as resources put into learning and information sharing. On the horizontal axis is the supplier’s specific investment which refers to the number of investment suppliers have done towards the relationship with the buyer. Like a buyer’s investment, these are also tangible and intangible and include investments in specialized facilities and location of a warehouse as well as, creating compatible information systems with a buyer and the sending of guest engineers (Wasti et al., 2006).

Bensaou argues that not one relationship is perceived to be superior to any other, but it is acknowledged that different suppliers require different types of relationships and Bensaou found for high performing and low performing relationships in all four categories. This assumption that supported by several authors (Lilliecreutz & Ydreskog, 2001; Wagner & Johnson, 2004; Dyer et al., 1998). The success factor is related to being able to identify the characteristics of the exchange with the managerial actions taken to facilitate the relationship. It is the fit between the characteristics of the relationship and management that determines if the relationship will be beneficial or a burden to the organization. Bensaou also identifies what managerial characteristics are most suitable and beneficial to each of the types of

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relationships. These managerial guidelines are based on the most successful relationships in each category and what characteristics they have. Bensaou categories these into three criteria; Information sharing, Boundary spanners’ task, and Climate and Process.

Figure 1, 4 types of buyer-supplier relationships (Bensaou, 1999).

2.1.3.1.

Captive Buyer

The captive buyer relationship type is characterized by larger investments from the buyer and smaller investments from the supplier. The difference in the parties’ effort in investments creates an asymmetric relationship that in this proportion often means that the supplier has the upper hand. A captive buyer relationship often includes products that have experienced little to no development during the past five years. The same unchanged development also applies to the operations process and product price. Further on, the suppliers' market is often concentrated and consists of few and powerful suppliers that hold an advantage in technology or process related to their operation. Because of the concentration of suppliers and powerful bargaining power, if a supplier were to determine the contract the buyer would face difficulty in finding a suitable replacer. Under circumstances like these, the supplier can take advantage of its superior positions and create biased contracts that are beneficial to the suppliers.

Bensaou found that the managerial characteristics from the most successful relationships under the captive buyer category illustrated large investments and engagement from the buyer

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in exchange for little effort back from the suppliers, as indicated by the model. To succeed in such a relationship Bensaou found that to facilitate the complexity of the operation and product, continuous communication is of importance. The communication often engages several departments such as design, sales, manufacturing, and therefore, creating a “broadband” of communication networks. When it comes to the characteristics of the boundary spanners’ tasks, they are structured and predictable. However, despite the

structured tasks, the spanners found that they tend to spend a lot of time with their suppliers, whether it is for cooperation, assisting the suppliers in training, technical support, or other issues. The overall relationship climate between the buyer and supplier is a constraint and it is characterized by a low level of trust (Bensaou, 1999).

2.1.3.2.

Captive Supplier

Bensaou (1999) presents a second asymmetric relationship that opposite to the captive buyer, gives the buyer the upper hand. This relationship is characterized by products that are

influenced by new technology and are constantly being further developed. Due to the fast innovation related to these products the supplier's operations require heavy capital

investments. The suppliers’ market for these products is competitive and the players must constantly evolve and offer new technological solutions for buyers to stay on the market. The relatively high concentration of suppliers also gives the buyers a selection of substitutes that might have brought out a more developed product that further enhances the company’s performance. In this type of relationship, the buyer has larger bargaining power, because of the fierce competition between suppliers and easy access to substitutes. Buyers are seen to give a promise of continuous business to a couple of suppliers that produce the same products, with the restriction of being able to shift a smaller percentage of its purchase between the different buyers. This promise creates incentives for suppliers to develop products that are favorable and in line with the buyer's operation. However, despite the promise, this market is still competitive, and this can cause unfair agreements and uncertainty for suppliers, which is why this relationship is argued to be asymmetric in favor of the buyer. The management style most successful with this kind of relationship contains little

information-sharing between supplier and buyer. The information communicated is often focused on complex tasks related to coordination, rather than the development of product and planning. These managers spend less time on monitoring activities and dedicate fewer

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product and its substitutes. Further on, since little effort is put into monitoring the supplier's operation, the buyer also pays little to no visits to the supplier and its facilities, and all face-to-face communication is done at the buyer's desired location. However, despite the

minimum amount of communication and relationship building activities that are conducted in the captive supplier relationship, they are still, when executed properly, largely influenced by a high level of trust between the different parties (Bensaou, 1999).

2.1.3.3.

Market Exchange

The third type of relationship is not an asymmetric one but instead a more equal relationship between the buyer and supplier. Moreover, the market exchange relationship is characterized by highly standardized products that are based on mature and well-established technology. The suppliers often lack the benefit of proprietary technology and the products in this category experience little to no innovation to design and function and are produced with structured manufacturing processes. The supplier conducts a limited amount of customization to buyers’ specifications, thus needing less continuous engineering and design efforts. Since the products are often counted as a standard commodity and hold a mature technology the production requires a lesser capital investment in that comparison with the products in other relationship types. The markets for these products are often mature or even declining and characterized by high competition among many smaller suppliers, which of many buyers are old incumbents that have been in the industry for a long time. Because the nature of the product is standardized and the market is saturated, it gives rise to a large selection of suppliers for the prospective buyers. Which in turn, leads to lower bargaining power of the suppliers and lower switching costs for buyers. The fierce competition causes suppliers to compete on price and therefore, thriving towards an economy of scale by creating a portfolio of buyers.

The managerial characteristics of a successful market exchange relationship are based on little communication. Often the communication is limited to times of negotiation and bidding regarding new products or changes in prices or operation. The buyer has little to no influence on the products themselves and they are rarely customized or adapted to the buyer's

operation. Due to the simplicity and standardization of the products, suppliers employ little sales force but instead rely on reputation and simple ordering programs or catalogs to sell their products. The reputation of these suppliers has allowed them to create long-term relationships with their buyers. The coordination of these operations is often part of the

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organization’s routines which deals with ordering, delivery, inventory, monitoring, and quality. Further on, the boundary spanners receive their tasks as highly structured and routinized with little deviation from the norm. Because of the structured relationships and little communication, the boundary spanners’ only pay visits to the supplier in case of urgent issues related to the delivery of the product. However, despite the lack of joint-collaboration and communication, the market exchange relationship is characterized by a high level of trust between the buyer and supplier and it is shown that the parties share the burden, risks, and benefits of the relationship fair (Bensaou, 1999).

2.1.3.4.

Strategic Partnership

The last type of partnership that Bensaou (1999) identifies is the Strategic Partnership. This relationship is characterized by collaboration and heavy investments by both the buyer and supplier. Often the parties employ larger resources and assets towards each other which in turn increases the risk for each of them, in case the other party would fall through or

misbehave. Close collaboration and communication are preferred for this type of relationship because of the large investments, importance of product, and risks associated with the

strategic partnership. Furthermore, the products in this relationship are highly customized to the buyer and the parties often share the process of research and development. These products require a stronger engineering and technical capabilities and are constantly developing with the pace of the new technology, this also gives rise to suppliers having proprietary

technology. This fast pace in which products are renewed and developed makes the market highly competitive which companies that are constantly hoping to choose the right

technology for the business. Moreover, because of the risks and customization of products, the parties involved tying each other together by creating long-term and close relationships that can facilitate this integrated and network. Besides sharing research and development, the parties often collaborate within several parts of their value chain, such as in the development of manufacturing systems and coordination of delivery. The buyer and supplier also view their profitability and overall ability to do business as highly dependent on the other party and if one were to fail to complete its part if the relationship both companies would be greatly affected.

These relationships also require more resources and dedication in the managerial area as well. The communication between the buyer and supplier is continuous and besides meetings face-to-face, they often share reports, standardized rules, and integrated operational procedures to

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create a close relationship. Since the products are customized and the research and

development process is shared, guest engineers from the buyer are common and they often assist the supplier in the creation of the new products. Similarly, engineers from the supplier also pay visits to the buyer to see their assembly facilities and their operation to better adapt and customize their offers. Further on, because of ever-changing technology, decisions can quickly become irrelevant forcing new and fast decisions to be made. This uncertainty makes the tasks of the boundary spanner unpredictable and unstructured which is also a reason why they tend to spend a larger amount of time with their suppliers regarding coordination of operations. Moreover, the social climate in these types of relationships is shown to infiltrated by trust, since both parties invest large resources and commitment it is in both best interest that the relationship succeeded. This trust is further built on the tightly integrated operations, where suppliers are often engaged in the development process from an early stage. However, as with any relationship tension occurs, often relating to costs, time-planning, quality, or other operational processes. These disagreements are solved through collaboration and communication, rather than confrontation (Bensaou, 1999).

To conclude this portfolio model by Bensaou it can be identified that the buyer and supplier must create a relationship that is appropriate to the specific conditions that they face, and only then can the enjoy the benefits of a successful relationship. For example, the captive buyer style is beneficial in a price-based strategy, because the buyer's bargaining power is stronger in this type of relationship. On the other hand, the captive supplier relationship is preferred in situations that are influenced by a cost-based strategy, since the bargaining power of the supplier is stronger in this type of relationship (Yoon & Moon, 2019). Both captive supplier and captive buyer risks over and under-designing their relationships since the power of one party is stronger than the other, creating an asymmetric relationship which needs to be managed carefully (de Waard et al., 2019). Moreover, the market exchange relationship is more suitable when the products of exchange are standardized with established technology. While the partnership relationship is more suitable when purchasing products that are complex and are based on evolving technology (Yoon & Moon, 2019).

2.2.

Situation Analysis

In this section, a situation analysis will be conducted to present information regarding the case that is being studied in this research. The event and meaning of Brexit will be presented, as well as the current effects and forecasted future effects of the situation.

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2.2.1.

Brexit and European Union

On the 23rd of June 2016, the United Kingdom (UK) withdraw from the European Union (EU), an event that is commonly expressed as Brexit (House of Commons Library, 2020). Brexit is the compound of the two words, Britain and exit which together creates Brexit, throughout the report, Brexit will be used to refer to the UK’s exit from the EU.

The European Union is an economic union that was founded after the second world war by Belgium, France, Germany, Italy, Luxembourg, and the Netherlands, intending to end the frequent and lasting wars that had been causing harm to many European countries. Today it is a union that facilitates free trade and free movement between its members' states, it also has a united foreign trade policy that its members must follow. Moreover, the union has the power to constitute legislations that are directly enforceable in the member states, meaning, that it acts both as an economic and legislative power (Europa, 2019).

After the Brexit vote, it was later announced in March 2017 that the two-year countdown to the UK leaving the EU began, initiating an expected exit date of 29th of March 2019.

However, the house of commons voted to seek permission from the EU to extend the period and after a meeting of the 27 EU member states the UK was given two options. Option 1 was a postponement to the 22nd of May 2019 in the case the withdrawal agreement would gain approval from the British parliament. The second option was a postponement to the 12th of April 2019 in the case the agreement would not gain approval from the house of commons. Once again, the Prime Ministers sought a further extension, and during a meeting with the European council, the UK was granted an extension to the 31 of October 2019. The Prime Minister’s new Brexit deal was rejected, and a further extension was requested. The last and final extension came to be set for the 31st of January 2020 (House of commons Library, 2020). The UK is now in a transition period where an agreement will be constituted and enforced on the 1st of January 2021 (Etherington, 2020).

Moreover, The UK parliament has forecasted the effect of Brexit under four different scenarios: WTO, Free Trade Agreement, EEA, and May trade deal. All deal is predicted to cause a decrease in the UK’s long-term GDP growth. Further on, the forecast believes that the May trade deal is the one most likely to happen and in such case, Britain long-term GDP will decrease with 2,1% if the immigration rules do not change or 3,9% if the immigration is equal to net zero (House of commons Library, 2019). Further on, two institutions have calculated forecasts like the House of Commons, the School of Economics forecasted a

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decrease in UK GDP of 6,3-9,5% while the National Institute of Economics forecast a decrease of 2,25% (Mugarura, 2016). Escaith (2018) found that initial forecasts showed decreases in Britain's GDP to up to 20%, while newer investigations illustrated a lesser effect that also aligns with the forecasts of the authors previously mentioned.

Furthermore, several authors have investigated the impact of the referendum has had on the UK so far (Born et al., 2019; Bouoiyour & Selmi, 2018; Crowley et al., 2018; Nasir & Morgan, 2018; Norman, 2016). The research showed that the UK’s GDP growth slowed down after the vote (Born et al., 2019) and a negative effect on the long-term trend of the British exchange rate was identified using the real exchange rate model introduced by Edwards (1994) (Nasir & Morgan, 2018). Despite that Brexit is yet to go through and implemented, it has already shown effects on the relationship between British and European companies. It was shown that the trade policy uncertainty associated with Brexit meant that British exporters formed fewer new trade relationships with EU partners and that more UK companies stopped exporting to EU countries since the referendum

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3. Methodology

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The purpose of this chapter is to introduce the methods used in this thesis and why those were chosen. Research philosophy, research approach, research method, data collection, ethical consideration, and data analysis will all be covered in this section. An overview of the methodology is shown in appendix A

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3.1.

Research Philosophy

A research paradigm is a philosophical structure that leads how the study should be

conducted. Philosophy is based upon one’s outlook and perspective about reality as well as the kind of knowledge possessed. This study is conducted with an interpretivism paradigm. According to Collis & Hussey (2014), interpretivism is formed by ones’ perception and hence the social reality through this paradigm is subjective. On the other side of the spectrum is positivism which has been believed to be objective, as the reality has been deceived to be autonomous from oneself. Interpretivism aims to examine the intricacy of a social

phenomenon with various ways to explain and interpret the meaning of the phenomenon drawn from qualitative research. While positivism implements a logical interpretation to achieve accuracy and objectivity through measuring the occurrence and development of the finding through analytical testing of the quantitative data (Collis & Hussey, 2014). As the purpose of this study is to explore what effect has Brexit had on the buyer-supplier

relationship, rather than measure the effect through testing the statistical data with hypnotises, interpretivism is the chosen paradigm.

3.2.

Research Approach

While conducting research various approaches could be applied. One of these being a deductive approach, which is a method where a frame and base of a theory is created, and which is then followed with testing the hypotheses to empirical observations. Inductive research is another approach that may be followed. This method generates theory from collected empirical data, meaning that the theory is based upon the empirical findings rather than theory leading the empirical data (Collis & Hussey, 2014; Dubois & Gadde, 2002). Furthermore, in between a deductive and an inductive research approach lies an abductive

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research approach. With this method, a persistent interaction between the theory and

empirical observations is followed throughout the writing process (Dubois & Gadde, 2002). This study has features fitting to an inductive approach since the findings are established through the observations and empirical findings of the phenomenon of Brexit, and its effect on the buyer-supplier relationship. Therefore, an inductive approach has been chosen for this thesis.

3.3.

Research method

A qualitative study has been chosen for this thesis. It is often used to gather more in-depth findings through a smaller range of observations (Ghauri et al., 2020) and allows to collect data in multiple ways, such as interviews and observations (Curwin & Slater, 2008). It is the most suitable approach since the qualitative method allows the researcher to go beyond the existing theory and to present more detailed and in-depth findings regarding the purpose and the structure of this study. Moreover, since the chosen paradigm is interpretivism it further supports the choice of the qualitative study.

This thesis follows a case study methodology. It is a technique used to analyse an event in a natural environment using different means to acquire comprehensive knowledge (Collis & Hussey, 2014). According to Collis & Hussey (2014), there are five stages to follow in a case study. The first step would be to choose the case. The second is to conduct a preliminary analysis of the topic, that is followed with data collection and interpretation of that data. The last stage is to write the research based on the case study information.

In this thesis, Collis & Hussey's (2014) frame of logic has been followed. Our purpose is to explore what effect Brexit has had on the characteristics of buyer-supplier relationships between European and British companies. The literature review was created to build a base of the existing literature as well as the support and structure process of the data collected. Three purchasing specialists have been interviewed to determine the effect of Brexit. The rest of the data was gathered through secondary sources, such as peer reviewer-academic articles, books, and various web pages. All the gathered materials were scripted and divided into a relevant category to ease the analysis process. The data was interpreted, and the results were

concluded using the Bensaou (1999) framework and the information collected through primary and secondary sources.

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3.4.

Data Collection

3.4.1.

Sampling

A sample is a selection from an overall targeted population (Brewerton & Millward, 2011; Collis & Hussey, 2014). A non-random sample is chosen since the population is very broad and it would not be efficient to use a random sample for this thesis (Brewerton & Millward, 2011). In this the focus is on the population of buyers from EU countries; therefore, a non-random sample has been chosen from that population. Collis & Hussey (2014) explain three main methods that could be used to choose a non-random sample. First is snowball sampling or networking, where the collection of samples aims to target people with knowledge

acquired for the specific phenomenon covered in the research. The selection of additional samples is based on already existing samples and their network. Second is judgmental or purposive sampling which is like the previous one. The difference is that the sample selection is chosen by the researcher prior and no leads are followed to collect more samples. Last is natural sampling, also known as convenient sampling. With this method, the researcher does not have a lot of influence on the selection of the sample, but it is mostly based on the availability of the sample at the time (Collis & Hussey, 2014).

A convenient sampling has been chosen to fulfill the purpose of the research with the most efficiency, this method also complies with the chosen process of selecting the sample. The criteria for the chosen sample were that the individuals would work for an EU based company that has suppliers in the United Kingdom. The final sample from Sweden was chosen based on personal contacts, while the sample from Estonia was initially explored due to accessibility and the knowledge of the Estonian business environment. Altogether 15 individuals were emailed for the study, 8 individuals were from Estonia and 7 from Sweden. Three of the 15 individuals answered and therefore, a sample size of three was chosen. One reason for the lack of responses could be the influence of the Covid-19 virus which affected a lot of businesses (Fernandes, 2020; Lind, 2020). This could have hindered their ability to participate since they were forced to dedicate more attention to the delicate issue that the virus caused.

3.4.2.

Primary data

Primary data is information that has been gathered with a unique purpose and for a project (Curwin & Slater, 2008). The information does not occur in the existing literature and the

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data solely intention is to contribute towards the needs of specific research (Persaud, 2012). Primary data allows authors to have the flexibility to gather data that best fulfills the purpose of the research. On the other hand, it comes with great responsibility since the data will contribute towards the result of the analysis (Mazzocchi, 2011) and thus, need to be of good quality (Mazzocchi, 2011; Persaud, 2012). According to Persaud (2012), the most frequently used approaches to gather primary data are “self-administered surveys, interviews, field observation, and experiments”.

Three semi-structured interviews were conducted to collect primary data for this thesis. The semi-structured approach offered the interviewee the possibility to elaborate on and give a more in-depth scope of the topics. This approach gives interviewers more control over the process and a chance to come up with follow up questions if needed (Collis & Hussey, 2014).

3.4.3.

Secondary data

Secondary data is information that already occurs as a source by other authors. The data has been previously gathered for different purposes than that of the researcher collecting the information would have (Boslaugh, 2012; Curwin & Slater, 2008; Ghauri et al., 2020; Persaud, 2012). In this thesis, the secondary data was collected through three main research platforms Scopus, JU Primo, and Google Scholar. The information was gathered from peer-reviewed and academic articles, books, and web pages. Even though the aim of the data has a different purpose, it is useful as a source to create an overview of the general topic and to structure the research (Boslaugh, 2012; Mazzocchi, 2011). Secondary data helps save time (Boslaugh, 2012; Persaud, 2012) as well as provides necessary information of good quality and is often easily accessible (Persaud, 2012). The gathered data helped to create a

comprehensive theoretical framework and background to this thesis supporting the study with factual and reliable knowledge.

The secondary data was gathered by using the keywords “buyer-supplier relationship”, “business relationships”, “characteristics” and “typology”. The search was further filtered from most to least cited and the field of study was limited to “business, management and accounting” and “economics, econometrics, and finance”. Next, the key model was chosen, and data was collected in the same way as previously. Simultaneously, information about Brexit was gathered through various webpages and academic articles to get an overview of the event. References from relevant literature were used to gather further information. The

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search process was continuously done until sources started to repeat themselves, this process generated necessary information to create the literature review.

3.4.4.

Interview

Interviews were chosen to collect primary data, which allows the data to be examined in a broader range through questions, revealing what the interviewee does, thinks, or feels (Collis & Hussey, 2014). Interviews were conducted face-to-face and through the video platforms Microsoft Teams and Google Hangout. According to Collis & Hussey (2014), face-to-face interviews are the most classic method, and even though it may be time-consuming it gives the advantage to gather inclusive data. Another approach is the web-based method, few disadvantages saw mentioned with this method such as limitation of sample and necessity of internet access from the interviewees (Collis & Hussey, 2014). In this study, these limitations were not seen as problems since it allowed for a broader sample and most companies have internet access which made it convenient to communicate with the participant. The interviews were conducted with three participants, one from the technology industry and the other two from the automotive industry. The first interview was a face-to-face interview at a location chosen by the participant. The second interview was initially booked as a face-to-face interview but due to the outbreak of Covid-19 and new company regulations, it was rescheduled as an online meeting through Microsoft Teams. The last interview was a web-based interview through Google Hangout. The duration of the interviews ranged from 40 minutes to an hour.

The interviews were semi-structured with open-ended questions. In a semi-structured interview, some questions are prepared before the actual interview to initiate a conversation with the participant about the topic of interest. The rest of the questions are generated during the interview (Collis & Hussey, 2014)014). The interviews included 14 main questions and 27 follow-up questions. All the questions were open-ended questions meaning that the answers allowed the participant to express their thought and opinions (Collis & Hussey, 2014). The semi-structured interview gave the interviewee freedom to elaborate on the topic as much as they wished to but with enough structuring to avoid drifting off-topic. The follow-up questions were developed in case the participants were short worded to help open the question for them to make it easier to answer.

The interviews began with a short introduction of the authors as well as the background and purpose of the study. Then the permission to record the conversation and details regarding the

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anonymity was covered. With all the participants it was agreed that their involvement, as well as the company they represent, will stay anonymous. Therefore, the interviews were labelled as “interview A”, “interview B” and “interview C” and the participants as “A”, “B” and “C” matching their interview label to minimize the confusion. Furthermore, the interviewee was eased into the main part of the interview with questions about themselves and the positions they hold. The main interview questions were based on Bensaou (1999) framework which has been explained in detail in the literature review. The meeting was summed up with general information on what could be expected after the interview and the participant were thanked for taking their time to be part of the study. The overview of the interview guide can be found in appendix B.

3.5.

Ethical Consideration

3.5.1.

Research design, data collection, analysis

According to Collis & Hussey (2014) “the term ethics refers to moral values or principles that form the basis of a code of conduct.” Ethics has been a consideration throughout the whole process of writing this thesis, from data collection and analysis to the research design and discloser of the findings. Bryman and Bell (2007) have composed a set of ethical principles, gathered from multiple authors (Collis & Hussey, 2014). The principles are as following: harm to participants, informed consent, privacy, deception, data protection (Bryman et al., 2007).

Multiple precautions were taken to fulfil the ethical principles previously mentioned. Before each interview, some of the questions were sent to the participant for them to get familiarized with the topic and prepare for the interview. That allowed the interviewees to get more comfortable with the subject matter as well as express any concerns before the interview. Also, before the interview, all the participants were sent a consent form which informed them about the purpose of the study and their involvement in it as well as where and by who the collected data will be published. Furthermore, the content form stated that their participation is voluntary and if desired they can withdraw as a participant at any time throughout the writing process of the thesis. Lastly, they confirmed their consent to be part of the study. Additionally, with one participant a non-disclosure agreement (NDA), sent from their side, was signed by all parties to assure that the desired requirements were met by all individuals involved in the study. During the interview, the information given before such as the purpose

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of the study and anonymity was stated again. Also, the permission to record the interview was acquired from each interviewee, and to ensure more security for the participant the recorded data was stored in password-protected devices which were only accessible by authorized individuals.

3.5.2.

Trustworthiness

Trustworthiness can be established through four principles: credibility, transferability, dependability, and confirmability (Lincoln & Guba, 1985).

Credibility could be achieved through triangulations or respondent validation (Bryman et al., 2007). This study uses both techniques. Data was collected from multiple sources such as various interviews as well as multiple secondary sources. Furthermore, respondent validation was obtained through follow-up email when necessary to avoid any misunderstandings in the data. Lastly, the final findings of the study were sent to each participant.

Transferability is provided through the relevance of the study as well as the depth of the data for the evaluation of future studies (Bryman et al., 2007). The relevance of this work has been stated in the problem sections to gain the transferability of this thesis. Also, the study has been designed in a coherent structure and follows a logic that enables other researchers to use it in future studies.

Keeping records of data gathered throughout all the stages of the writing process will enable the study to establish dependability (Bryman et al., 2007). The information collected has been well organized under adequate themes. Most data have been stored on two of Microsoft office online platform programs, Word and Excel. The data was stored online to prevent loss which would have been a risk when using a hard drive, as well as due for the convenience of easily being able to share the information between the authors. That will also provide the ability to access any necessary information by the authors and if required approved third parties. Moreover, the sensitive information, such as interview audio records and scripts, have been stored in password-protected devices to protect the participants.

Lastly, confirmability is attained by providing proof that the researcher has not influenced their conclusion and findings by their own beliefs, or the literature provided by other authors (Bryman et al., 2007). That has been achieved in this study by providing a clear structure of the research design, data collection, and analysis as well as the use of the participants' quotes where it is relevant and applicable.

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3.6.

Data Analysis

Data analysis has been conducted through a logic of thematic analysis (Braun & Clarke, 2006) using the Bensaou (1999) buyer-supplier relationships portfolio model as an analysis tool. According to Braun & Clarke (2006) “Thematic analysis is a method for identifying, analysing and reporting patterns (themes) within data.” The approach is built on a six-step guide to interpreting the data.

The first step is to get familiar with the information collected. That is done by converting vocal recordings to the written script. That process has been done manually. The second step is to code the script (Braun & Clarke, 2006). In this study, the codes will be based on the characteristics created by Bensaou (1999) for the four types of relationships covered in his study. The third step is to create themes (Braun & Clarke, 2006). The themes for this thesis are “Captive Buyer”, “Strategic Partnership”, “Market Exchange” and “Captive Supplier”, which are the main types of relationships covered by the Bensaou (1999) model. The fourth step is to re-evaluate the themes by going back to the coding process and to make sure that there is a logical pattern under each theme. After that, the themes will be overlooked with the data which will make sure that there is a logical flow between the data, themes, and the codes. The comparison between the data and the themes will allow for further information that may have been missed. The fifth step is the description of the themes, which includes defining the bases of each theme and develop a narrative from that information. The sixth step will be to conclude the analyse. A conclusion includes data which goes beyond just describing the information, it contains an in-depth analysis through adequate reasoning. Moreover, the finding will be supported by participant quotes (Braun & Clarke, 2006).

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4. Empirical Findings

_____________________________________________________________________

This chapter presents the empirical findings from the conducted interviews. The data collected will be presented separately for each interview and then subcategorized into the different characteristics presented in the Bensaou (1999) model as well as a subheading for Brexit.

_____________________________________________________________________

4.1.

Interview A

Interviewee A has been working as a strategic purchaser for 11 years in a medium to a large-sized company from Sweden. Before the position of the strategic purchaser, A started as a salesman for the same company, which is a position, he held for 10 years before moving into becoming a brand manager for 3 years, resulting in a total of 24 years at this company. As a strategic purchaser A oversees negotiating prices, deals, finding new suppliers, and end relationships with suppliers that are no longer wanted. Moreover, A also works with implementing new products together with existing suppliers, as well as the opposite, take away outdated products from existing suppliers. A is also responsible for conducting audits of both new and old suppliers, to make sure that the suppliers are following the agreed

standards, code of conduct, and other general regulations.

The company has three divisions within the industrial industry which develops, market, and sell products under well-known brand all over the world. It has over 1600 employees across 18 countries and had reported annual revenue of 3,7 billion SEK in 2019, the company has also been listed on the Nasdaq Stockholm stock exchange since 1987. Works within the division called automotive Equipment which produces several products which of some hold over 50% and 65% of the world market. The automotive division which will be the division in focus has around 160 direct material suppliers, which of two are from the United

Kingdom.

The two British suppliers produce two important products that have been adapted and

customized to the company’s needs. One of the suppliers has been working together with the company for over 20 years, while the other one is newer and has been a supplier for roughly 3 years. A is responsible for the first supplier and will be one of the suppliers analysed, which further on will be referred to as supplier 1.

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The overall attitude towards suppliers has not been affected by Brexit. A also adds that their logistics department is only expecting a larger volume of forms and administrative attributes, as well as some sort of custom or tariffs. However, the company is not expecting the trading costs to rise more than 5-10% which is not seen as a large problem, but only an additional cost to add to the offers of the British suppliers.

“...we try not to kind of treat different suppliers in different ways, so we have supplier it’s a supplier even if it’s in Britain or India or Sweden we try to treat them same”

“I think we kind of, so far we have the kind of the same relation with them (British suppliers) as with others because I have suppliers in many countries.”

“...I’ve been talking to my logistic department and they say that according to them it

shouldn’t be a big problem. We fill out some more forms and if there should be some kind of customs or something like that it shouldn’t be that much either so kind of take into

considerations that maybe we, aim for it should be like 5-10% more expensive and it’s mainly because someone has to take care of the custom.”

“We try to have an equal view on everyone but of course if there be like 50% tax or

something on product on Brittan, of course, we will add that on to their offer and compare it to others”

What has been identified by A is that some of their suppliers of indirect material with production in the UK are looking into moving their production to the EU, this, however, is not solely because of Brexit but also due to lower labor costs. Though one supplier had mentioned that it wishes to move because most of its market is within the EU and they expect that that would benefit their production both in monetary terms and efficiency.

1. Supplier characteristics

Supplier 1 is a small to medium-sized company, that has been argued to be superior to any other company that produces similar products. It was also mentioned that when scanning the market, few possible subsites were found. Further on, initially, the supplier held an arguably larger negotiating power, since the company is dependent on its products, and as mentioned a final price increase would have been forced to be accepted on the company’s part. However, this power has been perceived as diminishing for the last years. This decrease is believed to be due to that the supplier is not able and willing to adapt its current production to the future solutions that the company is planning on shifting to.

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“We only found one or two companies that do kind of, almost the same products but they don’t do exactly the one that we want”

“...they had before really kind of strong (negotiation power) because of but now when we are working with a different solution, so that is a kind of game-changer but in the past, they have been quite a strong power to negotiate.”

1.1.Product characteristics

The specific product that A purchase from supplier 1 is based on an established technology that has seen little major changes during the years. The product has been customized to the company’s need and the changes made have mainly been on the request from the company. However, the product is intended for very specific use in various environments that require significant engineering efforts and expertise to perform well under different extremes. The changes that have been made to this product are minor and are problem drive, meaning that the changes have been made to fix a problem that arises. A also explains that the changes can be due to new environments in which the product is being used and therefore, require new adaptations.

“...the part that they produce in England is very special because they are one of the best in the world who do this special part and we have had a long relationship with them”

“... it’s kind of building on a standard type of product but they made a special model for us.” “The kind of technique is not that super high tech but the thing is that you need to know what kind of materials you need to have or use, you need to know how big forces you can put into it, you need to know because it’s air drive and you need to know how to seal... That is the kind of the technology to have, so we can work even if it is really cold or really warm and that kind of one as, something that they have been good of lately”

1.2.Market characteristics

The company of A is a medium to large-sized company, but it competes in an industry that is influenced by corporate giants that hold many resources. However, as mentioned the products that the company makes have proven superior and been differentiated from competitors. This has resulted in a large market share within that specific product-market. The specific division of automotive is dependent on the truck and vehicle market because those are in turn the

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company’s buyers. What has been identified is a stable growth for the company over the past years.

1.3.Information sharing

The communication process is said to increase during negotiation times, which usually are at the end and beginning of the year. That is when prices and terms are looked over and possibly changed or adjusted, during those times several emails a day might be sent and phone calls made. During the rest of the year, emails are used to check up on supplier 1 and the general communication is conducted roughly once a month.

However, physical meetings are much rarer, the last time A visited the supplier was two or three years ago, which was regarding new technology and product changes. Visits to the supplier are only done in association with new suppliers, new products, or if a critical problem arises. In that situation, personnel from the company’s research and development department or form the quality department often accompanist the purchaser. More often the supplier visits the buyer, which is said to happen once or twice a year.

“...we have a hard discussion on price, price discussions, and so on but we try to keep it as professional as possible because we are so depending on having them for some more time.” “The general thing is that we may have contact maybe once a month or something maybe every second month or something but when we have, during the beginning of the year or over the year shift, we have some price or discussions then there is a lot of discussions of course.” “If we take 4-5 year period we may go there one time and they come here four times. That is the most normal thing”

“...we normally have the meeting, they come her one or two times a year when we have some discussions and so on and then between that we only talk over the phone or emails.”

1.4.Task characteristics

As the few visits might have indicated, the time spent directly with supplier 1 is limited. The company only visits the supplier if necessary, when problems arise, or new products are being developed and do not have time to spend time visiting for courtesy or socializing. Once the visits do happen the indentions and tasks are clear to the purchaser.

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“We usually go there if it’s very important time we haven’t been for a long time, we can’t go there just for cutesy. If we have a new project we go there. If there is a big problem, we can go there together with some people from our R&D or quality side”

1.5.Climate and process

A is said to have a good relationship with the supplier 1, and they are viewed as reliable and competed it its area of expertise. They do have some joint efforts and cooperation, regarding the adaptions of the products that are developed together. As mentioned, the supplier is a leader in its industry and is said to holds a good reputation among its buyers.

4.2.

Interview B

Interviewee B holds the role of strategic purchasing director at a medium to a large Swedish company. B has been at the company for 12 years and during that time also worked as a purchasing manager, plant manager, and supply chain manager. During B’s years as supply chain manager B oversaw all logistics, quality, and everything related to production. A few years ago, the company decided to create the position of strategic purchasing director in which B works as today. The new position oversees the long-term strategic direction

regarding suppliers, suppliers that fall into this category are those that are involved with more research and development activities in collaboration with the company. The main question that is dealt with by B is the long-term perspective of the responsibility of the company’s suppliers, supply base, and costs structure.

Both interviewees A and B work for the same company, so the information stated about the previous company applies here as well. From now on, this company will be referred to as a company or buyer A/B.

As mentioned, the company does not treat the British suppliers any differently from others, instead, it aims at treating all suppliers equally regardless of origin, the only thing that matters is its performance. Neither has B seen any effect from the Brexit referendum on its relationships with its two British suppliers. B is said to be less worried about the possible tariffs since these would make it into the cost calculations and then evaluated on the same basis as other suppliers. The company is neither adapting its search for future suppliers away from the UK as a result of Brexit, this is because of its large market share in the country. B shares that it is beneficial for the currency footprint to balance the money used for purchasing products from suppliers and the money earned from doing business in the UK, as it