Creating value through aligned and misaligned business-to-business relationships: A case study of a fertility supplement in the health care sector

Abstract

The context of this study is human reproductive health and fertility. In New Zealand, one in five people are affected by infertility. A couple are considered infertile if conception has not occurred after 12 months of unprotected intercourse, or pregnancies have not resulted in a live birth. The study serves a dual purpose, being theoretical and practical. Taking a service-dominant logic view of value, the theoretical aim is to contribute deeper understanding of value creation in business-to-business (B2B) relationships, focusing on relationship alignment. While relationship alignment and misalignment are well-established concepts, knowledge is limited about interaction effects in the supplier-buyer dyad, particularly in the small to medium enterprise (SME) context. This study will address this gap by investigating relationship alignment and misalignment in a SME context. The practical aim is to assist SME suppliers in forming and maintaining closer buyer relationships. A single case study traces the process of establishing B2B relationships. The focus is the launch of HealthyBub (pseudonym), a reproductive health supplement. Data was collected from the wider health industry, a particular supplier (a SME pharmaceutical distributor), and its buyers (fertility clinicians); using participant observation, interviews and secondary data analysis. Data was collected April to December 2016, supported by the researcher’s internship with the supplier firm. The study found that factors across three dimensions acted on relationship alignment levels: cognitive (managerial), organisational (firm-level) and industry-related. Supporting previous research, in the cognitive dimension, four buyer-seller ‘interpretation spaces’ were key to successful relationships. Alignment within and between the dimensions and interpretation spaces increase relationship alignment overall. While misalignment between any or all dimensions and interpretation spaces was undesirable, it was tolerated provided mutual value was created and provided that a base level of alignment in other dimensions had been established. The findings explain why HealthyBub was adopted and endorsed by one buyer but not another, despite equivalent levels of misalignment in both relationships. Five recommendations support internal relational competency building for SME suppliers, internal knowledge building, buyer knowledge building, strategic flexibility, interaction flexibility and brand reputation building. The research strengthens the current literature on alignment and misalignment in the context of SME relationships. Further research is required to extend this knowledge to contexts’ outside of the fertility sector and external to the medical and health industry.