Background

You have recently started working as a business marketer for a Swedish company Viking Car AB that produces cars. Viking is a well-established Swedish car manufacturer. In the car industry the competition is high and the demands from the consumers are increasing. The competitors have started to develop new technologies that will attract consumers more and more, although some of Viking's consumers are committed to continue to purchase cars from Viking, others are looking for other Cars that involves high level technologies, such as self-driving technologies, different attractive designs and comforts in the car itself.

Viking has a long history of being a well-established car manufacturer and has worked with several suppliers in the world, one of the most important suppliers is the German company named Supplier A and they have been providing Viking with technologies for 30 years, in other words the relationship between Viking and Supplier A is strong and has been a long-term relationship for 30 years. However, Supplier A has problem with its finances, and they need to reduce costs and decrease their investments in their research and development (R&D) department. The owners of Supplier A have said that for the next five years there will be no investment in R&D and new technologies.

Another supplier, Supplier B from France is a company that Viking has never worked with before, and Supplier B is in the process of investing even more in their business. Their owners want to invest money in R&D and new technologies so that they can expand and take more market shares from their competitors such as Supplier A and others around the world. Based on reputation from other companies, Supplier B over promises and seldom deliver based on their promises. But the reason for that has been that they used to have investment problems. Recently a large investor company has decided to invest in the company and promised them to allow some of these investments to go into their R&D and new technologies.

Viking needs to decide what to do for the sake of not losing market shares to competitors, and since you are the marketer, one of the decision makers in Viking, you are faced with the situation whether you should continue the relationship with Supplier A which you have had a long-term relationship with or you should start a relationship with Supplier B since they are willing to adapt to your demands which they previously has not managed always to match it with promises.

Further, since supplier A has strong network position in your business network, they are well connected to other actors inyour business network while supplier B had a weaker network position in your business network. However, Supplier B has hired a new team of developers, increasing their network position and their activities are strong in term of future innovation but this is related to if the new investors allow them to use some of the money invested in their R&D and new technologies.

Q1. Use the ARA-model to discuss and analyze Viking Car AB's situation? Q2. If you were the manager in charge which supplier, would you work with? Discuss and reflect around the concepts of interdependency, long-term and short-term affects as a consequence of your decisions.