![]() For example, the manufacturers of military airplanes often also produce passenger planes for civilian airlines. Many suppliers also address the civilian business-to-business or business-to-consumer market with their products. Most defense suppliers not only supply to the domestic military but also export their products to other military customers. However, from the point of view of each supply company’s management, it is most important to decide in which business the company wants to stay and whether it has enough resources to realize the most attractive business strategy. The ultimate customer, the military, depends on the manufacturing and logistics support capabilities of all these suppliers to get the most advanced technology and weapon systems. In these markets, a small group of large supply companies have a dominating position, whereas a great number of small- and medium-sized suppliers are specialized in narrow segments and often function as subcontractors of the large companies. The outlined challenge of obtaining preferential treatment can also be found in the defense markets. customer attractiveness, play a role in receiving that treatment ( Pulles et al., 2016). This is the underlying reason why recent research analyzed how to receive preferential customer treatment and which other concepts, e.g. A firm that is capable of obtaining better resources from the suppliers than its competitors has an advantage in resources and will therefore more easily attain a competitive advantage ( Pulles et al., 2016 Hüttinger et al., 2012 Hunt and Davis, 2008). Other customer firms of that supplier might obtain better resources. If the supplier base is small, it is necessary to safeguard access to key suppliers and to secure tomorrow’s competitiveness, because it is not self-evident that a firm that collaborates with its suppliers will gain a competitive advantage through this collaboration. That discussion addresses the issue that an increasing number of manufacturing and service firms rely on fewer suppliers and thus are becoming more closely involved with those remaining suppliers ( Cannon and Perreault, 1999). In addition, there is an ongoing academic discussion about “customer attractiveness” and “preferential customer treatment” which has not yet been transferred to the defense context. This literature often applies management concepts such as strategic alliance, service contracts or performance-based contracting to the defense context to improve the efficiency and effectiveness of the buyer–supplier relationship in defense ( Bishop and Williams, 1997 Kapletia and Probert, 2010 Glas et al., 2013). The most recent research on the interplay between the military and the defense industry addresses the fact that many nations were forced to outsource tasks, hitherto performed by the military, to industrial (logistics) providers ( Hartley, 2004 Tchokogué et al., 2015). ![]() In the early 1990s, economic analysis addressed “conversion,” which means the substitution of military production by civilian production, due to reduced military production and development budgets ( Nironen, 1995). The literature is focused on the “military-industrial complex” ( Mills, 1956 Dunne, 1995) with the aim of enhancing efficiency by better understanding the interplay between the administration, the military and industry. The cooperation between the military and defense industry suppliers has been a long-standing subject of economic research. The full terms of this licence may be seen at ![]() Anyone may reproduce, distribute, translate and create derivative works of this article (for both commercial and non-commercial purposes), subject to full attribution to the original publication and authors. This article is published under the Creative Commons Attribution (CC BY 4.0) licence. Published in Journal of Defense Analytics and Logistics.
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