Power assessment as a high-level partner selection criterion for new product development projects

Abstract

In new product development (NPD) projects, various partners may be involved at different phases and their participation can lead to either success or failure of the project. Therefore, a company that launches an NPD project has to carefully select the most appropriate partners. Currently, partner selection in supply chains is often performed according to well-known criteria such as cost, delay and quality. However, problems could emerge in such processes due to the unavoidable power disequilibrium of the parties involved. The strongest party will sooner or later force the weaker ones to accept more challenging constraints. The use and abuse of power will lead to doubtless mistrust and frustration. Therefore, the awareness of the suppliers' power before any collaboration is of upmost importance and in realistic situations, it should be used as a high-level selection criterion. This article argues that the power of partners represents a significant issue for the achievement of a coherent supplier selection strategy. An innovative method is suggested to assess the power of each potential partner based on its performances. The joint use of a power-based selection approach and a performance-based selection approach is illustrated at the end of the article. This study demonstrates how power consideration can help decision makers in selecting more relevant partners.

Keywords:

• power
• new product development project
• partner selection

Acknowledgement

This research was performed partly by the support of ESTIMATE project (2008–2010), a Eurostars programme funded by the European Community.