The chicken or the egg: Does the service offering define the customer relationship or vice versa?

This study was motivated by supplier companies' increasing willingness to develop and deliver services in co-operation with their customers. Understanding of customer needs and tailoring of service offerings accordingly require customer involvement, and long-term relationships are emphasised for achieving the optimal fit between customer needs and the service offering. In the present networked business environment, where knowledge is distributed, a 'collaborative approach' between customers and suppliers is required in service co-creation (see, e.g., [1-3]). In other words, willingness to work together is one of the key success factors in service co-creation [4]. Both prior literature and observations within companies suggest that customers differ in their openness and in companies' willingness to involve the supplier in service co-creation [e.g., 5-7]. A supplier with a specific service offering may be able to provide a wider selection from that offering to some customers while other customers purchase only physical products. Relationships between globally operating customers and their suppliers are often unequal. Customers may strongly dominate the co-operation, and suppliers may have little negotiation power in the customer relationships. Customers may even have an 'adversarial' attitude toward their suppliers, and suppliers are evaluated primarily for the price of their products and services. Thus, occasionally the aims of suppliers and customers diverge from each other considerably, as the suppliers may seek expansion of their service offerings and closer long-term co-operation with their customers, while customers may look for short-term benefits. Still, the customer could benefit from closer collaboration, as, in tandem with the growing trends of centralisation of purchases, customers have become more dependent on their suppliers, in part because their own knowledge base on manufacturing systems, technologies, and methods has vanished [5, 8-11]. The purpose of this paper is to explore the interplay between the service offering of a supplier and the relationship between a supplier and its customers. This study contributes to the theoretical discussion of service offerings and B2B relationships by suggesting reasons suppliers struggle in utilising the full potential of their service offerings and proceeding to another level of co-operation with their customers. The dyadic B2B relationships between a metal-industry supplier and its four globally operating customers were studied through application of a qualitative case-study research approach, with in-depth interviews being the main data collection method.