Abstract
Background: This thesis explores the problem of barriers that prevent new entrants from gaining preferred supplier status within the building materials industry in New Zealand. The study identifies three key themes that influence the degree of control that established preferred suppliers have over the supply chain.
Method: The study adopts a mixed methods approach to investigate the barriers to preferred supplier status in the building materials industry. This approach involves conducting ten semi-structured interviews with industry experts and conducting a comprehensive literature review. In addition to these methods, thematic analysis was employed to extract key themes from the interview data, while causal loop diagram modelling was used to analyse the systemic structures underlying these barriers. By combining thematic analysis and causal loop diagram modelling, a comprehensive understanding of the barriers and their interconnected relationships was achieved, providing valuable insights into the complexities of the buyer-supplier dynamics in the building materials industry.
Findings: The study identifies three key themes that both building merchant category managers and suppliers influence the degree of control that establishes preferred supplier status.
First theme; The rebate system, plays a significant role in establishing and maintaining preferred supplier status. The study demonstrates how supplier rebate offers often shape the hierarchical structure of the supplier-merchant exchange. Social Exchange Theory is introduced to explain how this incentivisation can shape long-term strategic partnering between suppliers and merchants, creating a barrier for new entrants to penetrate the market.
The second theme; specification stringency, refers to the strict checks and balances applied to material specifications, often favouring established and well-known brands. This preference limits the market opportunities for new entrants and further strengthens the position of selected preferred suppliers.
Finally, the study identifies unethical practices within senior management departments as a significant barrier for new entrants to gain preferred supplier status. These practices include bullying-type behaviour and implementing policies that promote an anti-competitive culture.
The findings highlight the need for increased competition and more robust regulations within the building materials industry to prevent the establishment and maintenance of anti-competitive practices.