The Interconnectedness of Relationships for a Propulsion and Maneuvering System: A case study with a supplier network perspective in the maritime industry

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SAMINT-MILI 21037

Master’s Thesis 30 credits May 2021

The interconnectedness of

relationships for a propulsion and maneuvering system

A case study with a supplier network perspective in the maritime industry

Johan Grönberg

Master’s Programme in Industrial Management and Innovation

Masterprogram i industriell ledning och innovation

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Abstract

The interconnectedness of relationships for a propulsion and maneuvering system

Johan Grönberg

The purpose of this case study is to understand how actors interact from a supplier perspective within the marine business, discuss what the findings are implying, and develop a marketing strategy for a propulsion and maneuvering system. Industrial marketing is an essential activity for companies to delivering and managing value to their stakeholders. The academic body of this research uses network theory and relationship marketing as a framework for

understanding the social setting.

The research focuses on understanding and interprets how relationships are interconnected to actors and how the links for a relationship are formed.

There are too few studies with a normative approach focusing on a product, which can have practical usefulness for managers, entrepreneurs, and

organizations. This study applies a case study design for a supplier perspective in the marine business with an abductive method. The data collection uses a qualitative approach to get in-depth knowledge of how the participants perceive the world. In the iterative process for gathering data, the first phase uses unstructured interviews, and in the second phase, semi-structured interviews. The findings imply that information is an essential element for a relationship to create trust and commitment between actors. Information is further discussed for how it can influence decisions that play a significant part for the focal supplier and discussions concerning how marketing activities can be developed for the propulsions and maneuvering system.

Keywords: case study, management, business networks, industrial marketing, relationship marketing, connectedness, value-drivers

Supervisor: Alexander Johansson and Jacob Håkansson Subject reader: Peter Birch

Examiner: David Sköld SAMINT-MILI 21037

Printed by: Uppsala Universitet

Faculty of Technology

Visiting address:

Ångströmlaboratoriet Lägerhyddsvägen 1

Postal address:

Box 536 751 21 Uppsala Telephone:

+46 (0)18 – 471 30 03 Telefax:

+46 (0)18 – 471 30 00 Web page:

http://www.teknik.uu.se/education/

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Popular science summary

Transport takes place everywhere in the world, and one of the most common ways of transport is through marine transport such as ships. As the distribution network expands and the increased demand for more efficient methods of transport. The development of efficient and energy-saving propeller systems that meet the market expectations is an important activity for companies to be profitable in a competitive market. Operating companies must also follow the increased number of regulations affecting the market by developing

environmentally friendlier solutions in the maritime industry.

The company Atlantica, a global manufacturer of technical solutions for marine propeller systems, they have developed a propeller system that is considered an energy-saving solution, named the Seapsinner. Atlantica is the main supplier of these propeller systems to customers.

The customers consist of the owner who operates gigantic sea ships, the shipyard that builds the vessel, and the naval architect who designes the ship. This creates a complex network of several actors, and in the network, there are business relationships with each other. The actors have different goals of the relationship where they can perform actions to acquire resources.

By mapping the network, the interplay between actors, and create an understanding of the needs of the network, it is possible to develop a market strategy for the Seaspinner. This study is based on a specific case of a company where information has been collected through

interviews with people involved in the network. The study showed that there are several different links between each actor that create a relationship. By responding to these links that exist to the individual actor, you create a positive development for the relationship. Through the results of this study can further development and understanding of the network be accomplished with marketing activities to satisfy the individual actors.

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Acknowledgment

Through great support and assistance, this master's dissertation could be studied during the spring semester of 2021.Through the incredible support and help that has been received from everyone who has been involved and contributed to the work. I would like to express my gratitude for the guidance and support I received from my supervisor at Uppsala University, Peter Birch. His commitment, open-minded, reflective support, and the feedback he has been able to give have been incredibly helpful. I would also like to express my infinite gratitude to the case company. The knowledge and experience that the employees possess at the company have been incredibly helpful and made the study possible. At the company, I would especially like to direct my eternally indisputable thanks and express my humble gratitude to Alexander Johansson and Jacob Håkansson. They have guided me and been of great support during this study. I would also like to thank the people who have given feedback on my study to increase the quality. I am grateful to all the people around me who have given me support, feedback, and knowledge to be able to accomplish this study, thank you.

Johan Grönberg Uppsala, 20 May 2021

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1 Introduction

The introduction chapter aims to present the reader with the research field and the empirical case. The background to the topic will first be presented, followed by a problematization.

Thirdly, will the purpose of the study be given, and next, the research questions asked for the project. Finally, the structure of the thesis is explained.

1.1 Background

Atlantica is a company in the maritime industry that manufactures a propulsion and maneuvering system called the Seaspinner. Seaspinner is a propeller system that is

manufactured up to 9 meters in propeller diameter. It is an integrated propeller system that consists of the components: rudder, costa bulb, hub cap, and propeller. The propeller system is used by large ships, e.g., carriers, container ships, and ferries. The companies that possess these gigantic vessels are called the owner. The owner operates the vessel by themselves, or they can charter it to a third party. The manufacturer of these ships is called the shipyard, and they are responsible for building and installing all the equipment that a ship contains. The owner and a naval architect decide what products the vessel should be equipped with, which is later specified in a document known as the ship specification. The naval architect, also called the designer, is responsible for designing the vessel for whatever purposes of the ship.

The naval architect's objectives are to optimize the ship for its purpose and comply with the ship's specifications. The design of the vessel is including the integration of subsystems and their equipment. Subsystems could involve, e.g., the ship hull has low resistance in the water, power- and propulsion generation, complying with regulations, cargo space, the noise of the systems, and the vibration of equipment (Papanikolaou, 2014). In other words, the ship specification is a large document that involves many systems to consider when designing the vessel.

The purpose is to make the ship functional for the vessel's purpose and complying with what is agreed upon in the ship specification. A ship specification is a technical contract between the owner, the designer, and the shipyard. The ship specification describes the vessel's technical scope, which needs to be followed when the shipyard is building the vessel. The problem is that other actors influence the ship specification by performing activities to ensure that the equipment is specified in the ship specification. If the equipment is included in the ship specification, it automatically becomes a contract to sell the equipment, which involves several million Swedish kroner. However, Atlantica is a supplier to the described network where they sell the propeller system as equipment. Atlanticas interest is to get their equipment specified in ship specification to increase the sales of the Seaspinner.

Furthermore, to increase sales of propeller systems and to be a leading company in the market, they need to carry out value-creating activities for their stakeholders to strengthen their position in the market. Improving a company's function in a network of several actors, an organization can perform marketing activities to enhance the situation (Håkansson &

Snehota, 1995). Marketing is a crucial function in an organization for satisfying customers (Webster, 1992). The marketing mix, also known as the four P model, became a marketing paradigm around the 70s and has affected marketing practice until today (Grönroos, 1994).

He further argues that the marketing mix does not fully explore the market relationships and generate the actual demands in the marketing environment (ibid). Håkansson and Snehota (1995) argue that marketing activities could be developed accurately towards the stakeholders

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2 if one can understand the bonds that create the relationships between organizations. They further point out that relationships form a complex network where organizations are interconnected (ibid). Möller, Rajala, and Svahn (2005) explain that networks need more research that focuses on the value drivers that create the bonds of a relationship to enhance the market position.

However, with this in mind, the research is an exploratory case study on B2B marketing, relationship marketing, and the interconnections between organizations with Atlantica as the center of the network. Atlantica requires a marketing strategy for the Seaspinner that

influencing the actors that create the ship specification. Atlantica's challenge is to manage the owner, shipyard, and the naval architect's needs individually and simultaneously consider them as one network to succeed in selling the product. Due to the complexity of networks and the everchanging value [needs in terms of varying networks, customers, suppliers, society and so on]. This might create a challenge and an opportunity for the academic discipline and Atlantica. On the one hand, could industrial marketing research contribute to the scholars, as several perspectives of networks are needed for an objective picture of network studies.

Specifically, network studies in the maritime industry have not been found to the best of the researcher's knowledge. On the other hand, case design research might increase the awareness of value-creating elements in relationships for the focal organization perspective.

1.2 Problematization

Several researchers in the field of industrial marketing claim and point out that networks vary by their nature. Networks often differ from case to case because of actors everchanging needs, which usually make them complex (Håkansson & Snehota, 1995; Frow & Payne, 2009;

Möller, et al., 2005; Blombäck, 2006; Grönroos, 1994). Industry to industry has different stakeholders around it, and more in-depth, there are various components for forming the relationships that exist. This means that value-creating activities do not always necessarily have to be similar (ibid). It can be challenging for a focal company to take advantage of existing literature to implement a marketing strategy since each case differentiates in network studies. Consequently, it could create additional problems because the value-creating

activities are based on other actors' needs, which could create inaccurate marketing.

Furthermore, inaccurate marketing could mean that investments in marketing activities are a cost without a profitable return for the focal firm. Some researchers have published academic research of a descriptive nature (Håkansson & Snehota, 1995; Leminen, et al., 2008;

Grönroos, 1994). The practical and managerial use may become difficult with descriptive literature because it describes a goal state and not its path. On the other hand, there are several normative studies on network theory, but practical implications are often lacking and not relevant. Practical implications based on the individual unique case could be irrelevant for this case study. As mentioned, network studies are unique, which could mean that the practical usefulness is adapted to one specific case. Hence, normative studies may not suit this case study since interests between actors are different in networks.

Another problem that is mentioned in academic research is that some actors in a network are not interested in a relationship (Frow & Payne, 2009; Leminen, et al., 2008; Pedersen, et al., 2006). The reason is often stated to be that the cost outweighs the benefits (ibid). This could mean that the focal firm does not deliver the value requested in the network. American Marketing Association (2017) defines marketing as: "Marketing is the activity, set of

institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.". The point with former

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3 studies is that they frame it as the problem lies with the focal company's stakeholders. In other words, the stakeholders in the focal firm's network do not want to become a part of a business relationship. On the contrary, the problem could be a matter of adjustment or adaptation for the focal firm to deliver value and reduce the risk for its stakeholders (Grönroos & Ravald, 1996). Baraldi, Antonella, and Andrea (2013) arguing from a similar perspective that it can be a reward for the stakeholder if it is part of a business relationship.

These areas discussed in marketing with a network approach need further research to explain, interpret, and extend academic knowledge. First, there is a lack of practical managerial use of current research for the maritime industry. More normative studies need to be done that describe the structure and components of its relationships. This because marketing in a network context is situational, and the research could be used for practical purposes.

Secondly, it could be a question of how the focal company can become an attractive choice for its stakeholders in the relationships. In other words, not to use the argument: that some actors are not interested in business relationships. More studies are needed to show

perspectives that favor business relationships regarding a company's stakeholders. Finally, more studies should also focus on the focal firms' stakeholders, where the actors influence the company.

1.3 Purpose

The research aims to understand what elements that can be value-enhancing for the relationships connected to the product, Seaspinner. Additionally, based on the findings, suggest a marketing strategy that suits Atlantica and the market expectations.

1.4 Research aims and questions

The project will aim to understand how marketing activities could generate a positive attitude for the Seaspinner and manage these activities into a marketing strategy. As pointed out, network studies vary by nature. There is a need to conduct a case study on this network and the connections between the actors. The problematization section highlights the lack of normative studies conducted within network research and practical usefulness, specifically in the maritime industry. Additionally, as analyzed in the problematization section, the aim is to provide the existing research with a positive attitude toward engaging with a business

relationship with the focal firms' core stakeholders. When considering the aims of this study, it leads to research questions expressed to provide an understanding and a describing nature of the social setting.

Question one is formulated to understand the market environment. Then, questions two and three are formulated that the answers can be used to establish a marketing strategy. This is the origin of the following research questions (RQ):

RQ 1 How does a propulsion and maneuvering system supplier perceive to be connected to actors in the maritime industry?

RQ 2 How do relationships with actors develop from a supplier perspective for a propulsion and maneuvering system?

RQ 3 How can a propulsion and maneuvering system supplier develop marketing activities towards actors in the maritime industry?

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4 1.5 Structure of the thesis

This thesis does in section one presents an introduction to the study. The introduction aims to give information on the empirical setting and the academic topic that is applied for the

phenomena. Section two, the literature review and theoretical framework are introduced to present the concepts and theories that underlie this thesis. Section three is the methodology chapter, which refers to explaining the methodology and the research approach applied for this study. Further on, in section four, research findings are presented that are based on the interviews that have been conducted. It is organized to understand and explain the

interconnections in the network. Quotations from the participants are included to strengthen the content, and it is highly recommended that these quotations are read to understand genuinely. In section five, the discussion explains the empirical findings and the

interpretations of the social setting. Finally, in section six, a summary and conclusions derived from the discussion are presented.

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2 Literature review and theoretical framework

This section presents current research in marketing in a network context, which is relevant for this study. A theoretical framework will be presented and further be used for developing data collection and analysis based on the literature review.

2.1 Theoretical and historical introduction into industrial marketing

Industrial marketing has been transformed through history, and nowadays, it is considered an essential activity for organizations to reach out to their markets. According to Webster, the first proof of academic research is found in the early 1900s when farmers in the USA would bring agricultural products to the market (Webster, 1992). The debate about marketing at the time was descriptive approaches in social and economic marketing processes. The managerial orientation was excluded from the debate, in other words, how the managerial activities were executed and planned (ibid). In the middle of the 1900s, the American Marketing Association define marketing as: "Marketing is the performance of business activities that direct the flow of goods and services from producers to consumers." (AMA, 1948 cited in Ringold & Weitz, 2007).

Furthermore, Webster (1992) arguing that the managerial approach emerged during the '60s and '70s, where the manager was engaged with decision-making and problem-solving tasks based on the economic capabilities of the focal company. It was a new paradigm for

marketing management and became a crucial function in organizations whose prominent role was to satisfy the customer. The managerial activities involved sales management, planning, R&D, pricing, promotion, and distribution (ibid). Grönroos (1994) explains that this approach was the birth of the well-known marketing mix, the four Ps model (price, promotion, place, and promotion). The four P model was relatively undisputed in academic research, and it still influences marketing management today (ibid). Grönroos (1994) explains that the four Ps (price, product, place, promotion) was a dominating paradigm in marketing since 1960 and has influenced marketing practice. "Marketing in practice has to a large extent been turned into managing this toolbox instead of truly exploring the nature of the firm's market

relationships and genuinely catering to the real needs and desires of customers.". He criticizes the marketing mix model for being a list of variables to describe the social setting and it becomes obsolete due to marketing changes. Furthermore, it does not suit every social setting, and in response to that, other researchers have added Ps to suit their situational context in research. The network approach replaced the marketing mix because of mentioned reasons and was not market-oriented (ibid).

In the 70s, Kotler (1973) presented a normative description of how the managerial marketing role should act in different circumstances depending on the supply and demand of the market.

Simultaneously when speaking of timeline, Sweeney (1972) presents a thought-provoking article. It was debated whether marketing was a social process or whether it was a technology.

It was argued that it is not in the technology but in the social reforms that the society creates and where the technology can be adapted to these reforms (ibid). Reve and Stern (1980) publish an article in marketing aimed at investigating distribution channels to identify the structure and stakeholder's interdependencies. In the mapping of the distribution network has the researchers divided the system into internal- and external distribution channels. The internal channels aim at investigating the function, and the external system explores the operation environment (ibid). Reve and Stern could be among the first researchers that tend to explore the current paradigm that is taking place today in industrial marketing. Namely,

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6 network theories and the interconnectedness between stakeholders which consists of

dependencies in relationships (Grönroos & Ravald, 1996; Frow & Payne, 2009; Grönroos, 1994). Henceforth, different perspectives on network theories, relationship marketing, and organizational behavior will be explored in the coming paragraphs.

2.2 Network theory

Marketing research in business to business is showing a wide range of the network perspective research between organizations (Axelsson & Easton, 1992; Möller & Wilson, 1995). Håkansson and Snehota (1995) have shown in their published book that organizations have business relationships with other organizations. Furthermore, they pointed out that these relationships consist of a complex network, where organizations have bonds with a web of stakeholders. The network itself consists of actors, business relationships, and resources. In the network, organizations strive to enhance their position in the web of stakeholders through relationships with actors and resources. The network has importance for marketing and purchasing because an understanding of the bonds that shape the relationships will make it possible for the focal company to do and develop marketing activities more precisely. To change or interrupt this connectedness between actors requires an understanding of the factors that make the bonds. The elements that form the connectedness may differ from business to business, for example, quality assurance, technical feasibility, deliver characteristics, and so on. An understanding of these pillars that make the foundation to the relationship and how the relationship affects other relationship vertically and horizontally. This understanding may create an opportunity for the focal company to improve its performance by affecting these elements in the relationship (ibid).

Håkansson and Snehota (1995) further explain that the relationship has a substance of three components: activities, resources, and actors. The activities represent the business interaction that happens between companies such as commercial, research, and technical development. In other words, activities that bond two parties together into a relationship. The second element is resources, and they are controlled by organizations and used in a relationship since these could be beneficial for the organizations in the relationship. For example, could resources in the relationship be human capital, technology, and knowledge which tie the organizations into a relationship. Thirdly actors, are those who carry out activities to strive for certain resources that are relevant to the actor, which means that the relationship is affected. In other words, actors are those who influence a relationship, which in turn affects the perception of each actor. Activities, resources, and actors could be used to analyze a relationship between companies, but the relationship needs to have a structural context in the network. Namely the function of the relationship, how the interconnectedness affects the structural network. There are three different functions that concur, which are called the dyad, the single actor, and the network function. First, the function of the dyad is the relationship between two companies where they together produce an outcome that none of them alone could accomplish. Secondly, the single actor function is when someone in the relationship strives to enhance their position by developing the own capabilities for economic benefits. For example, could this happen in a dyadic function where one part performs activities for exploiting mutual resources in the relationship. Finally, the network function is when a relationship affects other relationships in the network. That is how the structure of the network becomes influenced by the different relationships.

Håkansson and Snehota (1995) point out that there are recurrent structural characteristics of these relationships. Firstly, there is continuity in transaction history for delivering products,

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7 outsourcing, contracting for the long-term, etc. Secondly, the complexity of relationship, there are often several people with different background titles that have a relationship to other firm's people. It becomes more complex since the objective of the relationship varies from case to case, and these relationships are often exploited because of the different goals for the people involved. Thirdly, business relationships tend to have symmetrical resources and capabilities such as human resources, technical knowledge, and so on. But, in the buyer- supplier relationships, it is often the buyer that has the greater amount of resources controlled.

Finally, relationships constitute informality behind formal contracts. The informality often addresses conflicts, crises, and uncertainties that may happen to a relationship. Over time it can build trust, commitment, and confidence.

Another perspective on the network theory, Sofia Wagrell (2011), uses the 4R framework to decompose a part of the healthcare sector in terms of resources with a case study approach.

This is done to investigate the transformation from organizational hierarchy to a market- driven structure and its consequences regarding medical technologies in the organizational structure. The 4R stands for products, facilities, organizational units, and relationships. This approach is a resource tool for tracking resource connections to technologies (in this case) and investigate the interconnection between them, which is a part of the network theory. Further, to point out how the value changes for the resources in these connections. The researcher uses interviews in the data collection where the participants are from: the producing company, users in the medical sector, purchasing and accounting in the public and private sector of healthcare. As pointed out by Håkansson and Snehota (1995), a resource-based view with interconnection between them, that so to say take shape as a network, could further be used for marketing purposes.

2.3 Relationship marketing

Network research, as presented, gives the impression that one looks at the structural web of actors, resources, and links. By analyzing the network, one could possibly set up a marketing strategy based on the composition of three elements (actors, activities, and resources) and get a clearer picture of the marketing environment. Möller, Rajala, and Svahn (2005) claim that networks need further investigation of what the value drivers in these links are made of in order to enhance a relationship with a stakeholder. Hence, research tends to lead to relationship marketing with a closer focus on the customer. Grönroos and Ravald (1996) claim that" Value is considered to be an important constituent of relationship marketing and the ability of a company to provide superior value to its customers is regarded as one of the most successful competitive strategies for the 1990s.". A normal strategic approach for many companies has been to add technical features and services to the original product. This will increase the total value of the product, but it is often not demanded by the customers. Instead, they explain that the relationship to the buyer has value-adding effects for the product and by that, increases the total value. The customer might buy products and services because of the relationship, the product is fundamental, but the relationship has an important effect on buying processes. In other words, the value constitutes the fundamental product and the benefits of the relationship. They describe this through an equation:

𝑇𝑜𝑡𝑎𝑙 𝑒𝑝𝑖𝑠𝑜𝑑𝑒 𝑣𝑎𝑙𝑢𝑒 = Episode benefits + Relationship benefits Episode sacrifice + Relationship sacrifice

The total episode value is describing the balance between the benefits of having a relationship and the cost of having the relationship. That is, of course, if the benefits are increased and the

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8 sacrifice reduced, it gives a positive development for the relationship. The researchers explain that when a relationship could be enhanced in terms of safety, credibility, and security, it decreases the sacrifice made by the customer or supplier, which will be a contributing factor to a solid trustful relationship. Furthermore, they argue that taking the perspective of lower the sacrifice instead of adding value makes the company more or less forced to see things from a customer point of view, and that will result in increased value.

Exploring relationship marketing further, Frow and Payne (2009) express that relationship marketing has grown to a paradigm in business to business marketing (Frow & Payne, 2009;

Grönroos & Ravald, 1996). Their research is based on a longitudinal study where they have almost interviewed one hundred people that work with customer relationship management (CRM). The interviews are done with executives in marketing in IT sectors, consultancies, salespeople, and its customers. They further argue that relationship marketing terms need to be classified and defined since there is a spread of understanding for the concepts. This according to three strategic concepts depending on the goal for the focal organization and its connection to stakeholders in the network. The first concept is relationship marketing is to create long-term value for stakeholders in several levels and managing relationships for a better position in the network. Second, CRM is a strategic approach for managing customer relationships with a focus on creating value for stakeholders. Thirdly, customer management is tactical management with stakeholders that have an intimate level to the organization.

Depending on the strategic goal for the company, there is a possibility to choose a migration path towards a better position strategically with stakeholders. But they also mention that not everyone wants to approach customers in the relationship or vice versa because it is

considered costly compared to the exchange of a relationship. Another reason is that the supply chain contains retailers, which then creates difficulties in reaching its customer. In these cases, you should reconfigure the supply chain or bypass it with the goal of developing a relationship. Frow and Payne (2009) recommend doing future research in different sectors due to a lack of understanding of how and what the CRM factors affect stakeholders. They further explain that the migration paths, in other words, the strategies need further

investigation since there are individual challenges for building a relationship with a customer.

2.4 Relationship marketing in a network context

Möller, Rajala, and Svahn (2005) argue that network research has mainly focused on the structure of the network, in other words, who or what it connects to. Because of former

argument, they further state that research should investigate in the depth of how business links develops and how it can be managed. They also explain that a network is unique by its nature.

In other words, it depends on the business, segments, stakeholders, etc., which gives the reason to first understand the network itself and its components before developing managerial suggestions or capabilities. They present an approach to investigate the bonds that form the relationships, that is to explicitly specify the value activates carried out by the actors. Their findings are among other things, the main characteristics of the bonds are three concepts core value production; delivery capabilities, demand and forecasting, production and process capabilities, relational value production; partnering, incremental innovation, sharing customers, and future value production; network orchestration and visioning, radical innovation and mastering customers capabilities. For future studies, they recommend that these presented value-creating frameworks are a generalization in business to business networking, which is why they recognize further investigation of different businesses.

Additionally, for managerial practice, it is essential to further investigate efficiency and coordination regarding which relationships that could be vital for the focal company.

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9 Furthermore, on network theories and relationship marketing, Leminen, Raulas, and

Westerlund (2008) pointed out that customer sharing in a network will potentially benefit new levels of collaboration between actors. Customer sharing is a system where the customer can send out critical information in a network consisting of key stakeholders, where they have the possibility to follow up on customer needs. This leads to new opportunities for the company to grow horizontally and vertically, in other words, enable a broader range of product

portfolio for new customers, respectively the level of collaboration and building relationship in the network structure. However, some stakeholders are not interested in being a part of a relationship since the cost of the relationship can outweigh the benefits (ibid). Furthermore, CRM from a network perspective, Baraldi, La Rocca, and Perna (2013) are concluding that, when adopting CRM in a firm, it should be ready when speaking of infrastructures such as knowledge, training, internal barriers, and experience for influencing and improving customer relationship. Furthermore, they argue that established relationships with the focal company are complex, but the reward in information about customers can give advantages (ibid).

However, the two studies done by Leminen, Raulas and Westerlund (2008) about customer sharing and Baraldi, La Rocca and Perna (2013) implementing CRM in a network. These studies explore the phenomena with a network approach combined with a focal firm

perspective. Hence, give the reason to present a study that investigates a supplier perspective in network theory. Holmen, Håkansson, and Pedersen (2006) present a case study, involving three sub-suppliers who constitute a part of a network of the main supplier. Data has been assembled through semi-structured interviews with participants from different positions in all addressed companies. They can conclude that the initiative taken on behalf of the main

supplier will set things in motion when speaking of the relationship in the network. Where the sub-suppliers often support the change by adjusting their ongoing activities to the implications of the relationship. Adding to that, they have also identified that if the change is too radical, a supplier may withdraw from the initiative taken in the network (ibid).

2.5 Industrial network behavior

Grönroos and Ravald (1996) recommend that further research should be done on

organizational behavior in order to contribute to relationship marketing, further to explore the value drivers of organizations. Building on industrial buying behavior, Blombäck (2006) has done a case study on three companies and six of their clients, where it investigates the behavior of the organizations in the context of relationship and network theory. Data collection was done with semi-structured and unstructured interviews, and these were held with twenty-three participants both from the buying and purchasing sides. Furthermore, they asked to explain the buying- and decision-making process from a buying and purchasing perspective. The interviews have been analyzed through the thematic approach for identifying patterns in the transcribed material. The study shows that the buying behavior changes

depending on the uniqueness of the situation and that the buying organization will use one or several elements in order to make a decision. The individual situation serves as a means to explain the relationship between the buying organizations towards the supplier.

The researcher claims that the buying organization often searches in their own network at first and evaluates the relationship towards the suppliers. Additionally, about the situation, the buying behavior changing due to the types of products and if there is a new buy or a rebuy.

The participants in the study admit that the economic benefits are the most important, but the relationship is a crucial factor since it tells about trust, commitment, and risk. This is the main factor in the "unique selection situation," which will further influence the decision-making for

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10 the buying company. In this case, the elements in the decision-making process consist of; the concreteness of firm features, price, quality, delivery, reassurance of experiences, ease of current contracts, security of recognition, and an indication of association. The researcher explains that this behavior is unique because there are many parameters that come into play in the purchasing process. As mentioned, it can be relationships, type of industry, the complexity of the product, location, and so on. Therefore, the researcher recommends that buying

behavior should be studied case by case.

Furthermore, Thornton, Naudé, and Henneberg (2012) presented a case study that takes the perspective that the focal firm is the center of the network. Furthermore, they investigate organizational behavior by taking into consideration the interdependencies of focal firms' direct and indirect relationships. They have used semi-structured interviews to collect data and used the thematic approach for analysis. They identify four key themes in their analysis that function as a base for organizational behavior and that are also dependent on the firm's objective. The first theme is information acquisition, and it is vital for an organization to get information if they are to continue successfully operate their business. Including in the

information are local regulations for now and in the future. Trust and mutual understanding of stakeholders are needed for information sharing. Informal contacts to other actors are sources of information because they reveal new information about the network in context.

The focal firm can also gather information from marketing campaigns, sales meetings, seminars, newspapers, and so on in the public domain. The second theme is opportunity enabling, and it could create opportunities if companies spread their interaction among several organizations. By doing so, they build up a wide reputation in the network, which could potentially increase the demand for the products provided by the organization. Thirdly the strong-tie resource mobilization is connected to the relationship the focal company has with its stakeholders. With stronger ties, it becomes easier to mobilize resources to, i.e., solving a mutual problem since trust and commitment are components in a strong relationship.

Furthermore, they argue that involved parties will become more flexible in meeting market expectations and increase competitiveness. The last behavior, the weak-tie resource

mobilization, can take place when an organization identifies a stakeholder with weak ties to.

In turn, that organization has strong tie to a next-level stakeholder from the perspective of the focal firm. The next level stakeholder could potentially have valuable resources that are an advantage for the focal firm, such as customer base, relationships with others, etc.

2.6 Theoretical framework

Based on the literature review is a theoretical framework developed to analyze identified problems in this case study. This is a critical step for the researcher to sort out concepts in theory, which means that some theory needs to be excluded. It is reasoned in this thesis that relevant theory that fits into this case will be applied in the theoretical framework. In other words, it means that the concepts are decided by the researcher, who bases it on the literature review. Henceforth, mentioned theoretical concepts are used to understand and explain the components for the relationships in this thesis.

Håkansson and Snehota (1995) explain that understanding the factors that make the bonds for a relationship could give insight into developing a marketing strategy. Furthermore, by analyzing a relationship's substances and explaining the interplay between activities, resources, and actors, one could understand the situational context (see figure 1). Actors,

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11 resources, and activities will form a business link that is the foundation of a business

relationship.

Figure 1. The interplay between Actors, Resources, and Activities. Inspired by (Håkansson &

Snehota, 1995).

The connectedness that shapes relationships may change in different businesses, but an

understanding of these links could be used to develop marketing activities. Additionally, what these relationships have for structural function in the network. This scheme is helpful for this study to analyze the focal network and determine the elements for the relationships (see figure 1 and figure 2).

Figure 2. Links that form a relationship and develop a connectedness. Inspired by (Håkansson & Snehota, 1995).

However, Möller, Rajala, and Svahn (2005) argue that a relationship's main links are core value production, relational value production, and future value production.

Wagrell (2011) uses a resource perspective to investigate the interconnections between

resources and how resources change in value for the focal organization. This could potentially be used as an analytical tool to map how resources travel in the network. Furthermore, to understand how people perceive the value in the different relationships. When speaking of value and how it changes, Grönroos and Ravald (1996) explain that a relationship can change by modifying the sacrifice and benefits for an actor. Additionally, taking the perspective of lower the sacrifice instead of adding value makes the initiator more or less forced to see things from the other actor's point of view.

Furthermore, if the benefits are increased and the sacrifice reduced, it positively develops the relationship. Moreover, considering value, Möller, Rajala, and Svahn (2005) state that it is vital to specify the value activities carried out to the customer explicitly. However, economic

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12 profitability is the most important in a relationship. Additionally, trust, commitment, and risk are vital factors for a relationship in a decision-making process for selecting suppliers

(Blombäck, 2006; Thornton, et al., 2012). Price, quality, delivery, reassurance of experiences, ease of current contracts, security of recognition, and an indication of the association are links that can affect trust, commitment, and risk (Blombäck, 2006).

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13

3 Methodology

This chapter aims to present the research strategies that are applied in this study. First is the philosophical orientation, and second, the design of the research. Thirdly, the sampling of data is elaborated. Fourthly, qualitative data collection that is used for this study is divided into unstructured- and semi-structured interviews. Fifth, how the information was analyzed, and finally, how this study produces qualitative findings.

3.1 The philosophical orientation of the research

In this study, a particular perspective of reality will be studied, and it is important to elaborate on what reality this research focuses on. Reality can be seen from different perspectives. From a constructionist point of view, the network and relationships are merely a product of people's perceptions. In this case, networks and relationships are created to understand the social phenomena. It is reasoned that the philosophical orientation will be of a constructionism point of view (Bell, et al., 2018). Furthermore, interviews are conducted with social actors within the network, and their perspectives of how they perceive the social setting are collected. In other words, the research becomes a subjective understanding of networks and their relationships since data collection is made with social actors within the social setting.

Additionally, this research is a snapshot of people's perceptions of the focal network and its relationships. The research is subjective by nature because participants' perceptions and people are constantly changing [people quit, move, social change, and so on].

When speaking of the epistemological orientation, positivism is more suitable for studies with the purpose of testing theories. As previously mentioned, this study aims to explore,

understand, and interpret the social phenomena (ibid). Therefore, the philosophical orientation is interpretivism, and interviews are used to interpret and explain the social setting. It is worth mentioning that different philosophic orientations in research could exclude knowledge due to assumptions of the orientations (Bell, et al., 2018). For instance, if the researcher studies the network from a positivist versus interpretivism perspective. Moreover, the literature review that has been done shows that most of the researchers have used a case design with a focus on semi-structured interviews to explain networks. That might imply and assume that network studies should be studied with an interpretivistic approach. Additionally, by the former argument, the studies might be subjective by their own nature since it is a snapshot of the participant's perspective. Furthermore, the researcher has argued that there is a possibility that knowledge could be left out of the phenomena. Consequently, by selecting a philosophic orientation, one sees the phenomena from a particular perspective and possibly excludes others to provide different knowledge (Bell, et al., 2018).

However, in this research, the interpretive orientation is adapted for several reasons. On the one hand, it is reasonable and logical to follow leading researchers within the subject. Their knowledge and experience in the subject could give the advantage to use existing information and avoid pitfalls. Additionally, this study focuses on explaining behavior and interpret values made by the social actors in the situational context. Henceforth, this research follows

abductive reasoning. This research is an iterative process where it encounters the empirical social setting. Once at the social setting, the process is to move back to find the theory that explains the empirical phenomena (ibid). In other words, this process is a back-and-forth moving between the empirical context and theory. That for understand, explain and focusing the study on interesting findings.

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14 3.2 Research design

The function of the philosophical orientations should be taken as a broad strategy and guiding tool for this study to choose a proper research design. For this research to produce qualitative findings, analysis, and be able to answer the research questions, certain things need to be outlined. According to Bell, Bryman, and Harley (2018), the case design is often associated with a fixed location, an organization, detailed understanding, and in-depth investigations.

Another description, when the study contains research questions of "how" and "why," it is preferable with a case design (Sorin‐Peters, 2004). Additionally, when the researcher has low control of the investigation field, such as behavioral situations, case studies have been proven to be suitable (ibid). These descriptions of a case design resemble this study since the nature of the study and the research question are formulated similarly. Also, this study focuses on a particular organizational system, and the bases of research originate from a geographical location.

In more detail is the system in this research, the organizational network, where the objective is to explore the functional role of actors in the system for marketing purposes. It is argued that these networks are complex and unique by their own nature (Möller & Parvinen, 2015).

Hence, this research uses a case design approach to fully explore the object since the

particular system is considered an object in its own right in terms of uniqueness. Additionally, due to the complexity and uniqueness of network studies, there is a need for this study to conduct in-depth research. A case design enables in-depth investigations because the data collection is focused on a single case (Starman, 2013). The data collection could be

qualitative, quantitative, or a combination in case design. This study reasoned that qualitative collection would be of greater interest because the focus is to understand and express the situational context perceived by the social actors. In other words, it contains descriptions of the situation, social interactions, behaviors, attitudes, values, feelings, beliefs, and thoughts (Sorin‐Peters, 2004). This particular case has been selected because of the researcher's interest in the subject: industrial marketing. As previously argued, this research seeks to understand behavior in the social context, which will be subjective by nature since data collection is qualitative. Hypothetically, multiple sources could be a potential for data collection, obviously is that not possible concerning time and resources. Therefore, this needs to be outlined, the sampling method for choosing which data to collect is further elaborated in the next section.

3.3 Sampling method

The research questions asked in this case study function as a guiding tool for discovering data sources. Data sources connected to the research questions could potentially be many, e.g., people, documents, observations, etc. Hence, it is crucial to elaborate on the sampling method used in this study.

Purposive sampling is a method that is better suited for qualitative studies, and it is a non- probability sampling approach (Bell, et al., 2018). Furthermore, purposive sampling is

suitable for data collection for strategic reasons whenever the research environment is limited to gather data. In this research, some of the population connected to the research question are not relevant for various reasons, such as availability, willingness to participate, constrained by reviling sensitive information, etc.

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15 Henceforth, purposive sampling has been used, and the units have been strategically selected continuously after how the study has developed. Additionally, based on the availability of the participants. In other words, the research questions guide a significant part of the sampling.

Moreover, snowball sampling is a purposive method that uses people to build contacts with other samples relevant to the research (ibid). Snowball sampling has been used since Atlantica consist of many members. It is troubling for the researcher to know whom to interview and contact the right person. Therefore, snowball sampling has been deployed to get contact with samples outside Atlantica. The researcher has two contacts that work at Atlantica, and these have functioned as mediators in the sampling. When the researcher has expressed a need for collecting a specific sample, the mediators have pointed in the right direction.

In some cases, they have established contact between the researcher and the object on behalf of the researcher. Bakkalbasioglu (2020) recommends that mediators could be effective when navigating in large organizations. However, the researcher has to be aware of and not give the mediator the power to influence the sample. In this case, has the mediators not been a part of any interviews. They have functioned as a bridge towards the accessibility of samples. The samples were applied to answer different research questions (see Table 1).

Research questions Unstructured Interviews Semi-Structured Interviews

RQ 1 X

RQ 2 X X

RQ 3 X X

Table 1. Sampling for each research question.

Finally, the samples address the names; owner, shipyard, and naval architect as a general role within the maritime industry. In other words, when the participants were addressing such names in the thesis, it is a generalization of many companies that possess such roles in the maritime industry. However, the participants' generalizations of such roles are their perceptions through the many years they have worked in the maritime industry.

3.4 Data Collection

As mentioned, this study will use a case design approach and use two different gathering approaches, namely, unstructured- and semi-structured interviews. The unstructured

interviews are used in the first phase of collection, and the semi-structured interviews are used in the second phase. The idea was to explore the social phenomena in the first phase and use the findings for developing a semi-structured interview approach in the second phase.

However, each approach has advantages and disadvantages, which will be discussed for this study in the next section.

3.4.1 Interview discussion for this study

There are both advantages and disadvantages to different interview approaches, and it is crucial to state how it is reasoned in this study to produce qualitative findings. As previously mentioned, this study uses a case design. In a case design, two different interview approaches are often chosen, semi-structured and unstructured interviews. In semi-structured interviews, an interview guide is often prepared to address the specific topic. Also, the researcher wants answers from the participants to give the structure when analyzing the content. The advantage

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16 is that the level of comparability will be more manageable since the questions are structured similarly among the participants and for the answers to later be compared (Bell, et al., 2018).

It can be a good strategy to use semi-structured interviews when the researcher has a clear idea of what specific topics that needs to be addressed. The downside is that other information may be lost because the answers are intended to provide answers to the question being asked.

This makes that approach less suitable for explorative studies since structure hinders the participant's ability to express themselves fully.

On the other hand, unstructured interviews do not have a clear interview guide. It is often expressed in the form of one question and resulting in a dialogue. The benefit of this approach is that the interviewee can express more freely and maybe touch on subjects with their own perspective that the researcher could not expect. With unstructured interviews, it can be advantageous to the researcher to gain a more prosperous and deeper understanding of the social phenomena it aims to study (Wildermuth & Zhang, 2017). The disadvantage with this approach is that the information gathered could be comprehensive, broad, and sprawling. In other words, the collection of data becomes unstructured. As a result, the validity and reliability may deteriorate because it is unstructured. However, this study has used unstructured interviews in the first phase of gathering data with that reasoning. With a structure in the questions for the first phase, it would be an obstacle to interpreting the interviewee's perspective. The researcher did not have a clear idea of what this case was a case of, and theoretical concepts that should be addressed. It would further limit the mobility of the participants when talking about different topics. Therefore it is vital in this study to not limit the object when speaking of expression and structure. For natural reasons, this study is explorative with interest to understand and explain how participants interpret the social dilemma. In other words, how certain actors are affected by relationships to other organizations and how the relationship links are composed.

Additionally, the unstructured interviews provide a clear idea of what this case is about, which works as a base for developing the next data-gathering phase. Flyvbjerg (2006) pointed out that it can give insight into the practices of what this case a case of which is often not learned in the academic discipline. As has already been stated, it can be difficult to analyze unstructured interviews, which is one of the reasons why the next phase uses semi-structured interviews. Another reason is that the problem area is identified from the first phase, which means that there is no significant reason to continue with unstructured interviews.

Additionally, could relevant theoretical concepts be developed based on the first phase. An interview guide was developed for the second phase based on the first phase. Moreover, there was an opportunity to formulate questions that go straight into the problem. Further, that could be systematically analyzed. In other words, this is the practical implications in the research of abductive reasoning by moving back and forth.

3.4.2 Unstructured interviews in the first phase

The first phase of interviews was conducted with three participants and recorded on the digital platform "Microsoft Teams." One initial question was asked in the first phase of interviews, namely: "Can you describe the process of the Seaspinner from start to end and who are involved in the sales process?". An open question was asked to give the researcher an

understanding of how the Seaspinner moves in the organization. Additionally, to answer what or who the influencing factors are. As mentioned, the purpose of the first phase of interviews is to provide a clear background to the case and allow participants to express their views freely. Also, the researcher did not know exactly what the problem was, which was why the

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17 study was of an explorative nature. Additionally, to give the researcher answers about the participant's perspective and mapping the interplay in the network. It was vital because Atlantica is a large organization, and sometimes individuals do not know everything that influences the Seaspinner in the sales process.

During the interview, the interviewer actively asked follow-up questions such as why, can you please elaborate, and similar follow-up questions. That was a strategy to get in-depth knowledge, and it gave the participants the option to reflect around topics, which provided rich details in the case. The interviews were done with three strategically chosen participants that have the title “project engineer” in Atlantica. They were strategically chosen since the project engineers at Atlantica have close contact with the development of the Seaspinner and sales section. The knowledge they have stretched from research and development to the sales process. The participants are therefore covering interesting areas that are relevant for this study. This was a genuine reason to start the first phase by interviewing these people and understanding the social context. In other words, so that the researcher could interpret and understand the phenomena in the social context.

3.4.3 Semi-structured interviews in the second phase

In phase two, an interview guide was developed that could address the topics and theory more accurately. The problem area and theoretical concepts were identified from the first phase of interviews and the literature review. Further, these were applied in the semi-structured interviews. The questions asked in the interviews were formulated that directly touch on subjects for network theory and relationship marketing. To understand how the social bonds between companies were developed and the questions were phrased openly (see appendix B).

The first phase generated some unanswered questions about how the social setting functioned, which was the reason to formulate the interview questions for the semi-structured interviews.

Additionally, semi-structured interviews were applied to answer research questions one to three. However, in the second phase, these interviews were conducted and recorded on Microsoft Teams. The interviews were held with six participants. Three were from Atlantica who had the role of regional salesmen. The regional salesman is a role that is in direct contact with the customer and that focuses on selling equipment.

The other three interviews were conducted with two owners and one naval architect. With the interviews of the owner was a director fleet manager interviewed whose task is to supervision the company ships and routes. The other owner was a project engineer interviewed who supervised the construction and decided equipment on the vessel. Regarding the naval architect, the interview was conducted with one of the company's foundations and CEO.

During the interviews, the researcher asked follow-up questions on exciting topics for getting in-depth to the topic. The interviews lasted about 40-60 minutes, and then they were

transcribed word for word for what was said in the interviews. The interviews were later sent to the participants for controlling the content. The words that did not agree with what was said in the interviews are terminologies that fit the industry's correct nomenclature.

3.5 Data analysis

This case study was an iterative process, and a broad literature review was done on network theory, industrial marketing, and relationship marketing. The first phase of data gathering functioned as a framework. The researcher used the interviews to identify topics and

theoretical concepts within the network theory and relationship marketing. In phase two, the

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18 researcher deployed these concepts in the semi-structured interviews to directly touch on the subject. In other words, this thesis has at first used existing research in network theory and relationship marketing to be knowledgeable in the subject. Secondly, used unstructured interviews for exploring deeper into the social setting for identifying theoretical concepts.

Finally, the researcher used the theoretical concepts in the semi-structured interviews.

However, the data collected were analyzed with the thematic analysis approach to generate themes to build up proper coding. The program NVivo was used for analyzing the interviews.

First, phrases were sorted and organized into codes that withhold similar content, and then the researcher went through it to find themes. The themes were identified through recurring topics in the interviews. Also, linguistic connections were used to find themes, which are casual connections made by the participants, e.g., because and since (Bell, et al., 2018). These statements made by the participants are powerful statements that are assumptions of how they perceive the social setting. This could be essential knowledge since they are involved in a social process where their perspective could explain how the phenomena are shaped. The themes derived from the data were the network of the Seaspinner, energy efficiency regulations, owner description, shipyard description, and naval architect description. The network of the Seaspinner refers to recurring information about the network structural

composition. External forces of the network, data related to this theme were often regulations and linguistic connection of the information about regulations. Additionally, when organizing the information under the themes; owner description, shipyard description, and naval architect description. The program was used one more time to find the most recurring word that could be applied for identifying essential subjects in the respective theme.

3.6 Trustworthiness

In terms of assessing the quality of this case study, qualitative studies often use trustworthiness instead of reliability and validity. Trustworthiness consists of the four concepts: credibility, transferability, dependability, and confirmability (Bell, et al., 2018).

These concepts will further be elaborated on to determine the research quality for this case study.

3.6.1 Credibility

Credibility refers to if the research has been performed according to a credible method for collecting data, and if findings have been translated according to the participant's perspective (Bell, et al., 2018). In this study, two methods have been used to increase the credibility of the research, namely, triangulation and respondent validation. Triangulation is a strategy where it uses different sources of information for locating the phenomena (ibid). In the first phase of unstructured interviews, the research was conducted with three different data sources as a method for triangulating the phenomena.

Another approach for increasing credibility is to use respondent validation. Respondent validation is that the researcher confirms with participants if the findings respond to how they perceive the phenomena (ibid). In this study, the researcher used Microsoft Teams' platform to record the interviews and later transcribed the interview word by word as spoken in the interviews. This was done to avoid the researcher's interpretation of the phenomena and avoid personal inference when analyzing thematic analysis. After the interviews, the researcher sent the transcribed interview to every participant for respondent validation. The researcher wanted to ensure that proper terminology was used according to the business. This was