Partnership Advantage and Its Determinants in Manufacturer and Distributor Working Partnerships

This paper draws upon a social exchange theory perspective and the marketing channels literature to provide a conceptualization of partnership advantage. Partnership advantage directs consideration to the interdependent nature of manufacturer and distributor working relationships, and to the resultant need of each firm to be cognizant of the advantage that it provides to its partner firm, relative to alternate potential partners. The contribution of partnership advantage to competitive advantage in the final customer marketplace is also discussed. A key informant methodology and a structural equation modeling approach were employed to investigate the determinants of partnership advantage. Both the manufacturer firm perspective and the distributor firm perspective were studied, with sample sizes of 162 manufacturer firms and 199 distributor firms. Nine distributor firm characteristics were found to account for 66% of the total variation in partnership advantage from the manufacturer firm perspective. Market penetration ability, with a path coefficient of 0.57, made the greatest unique contribution. Thirteen manufacturer capabilities explained 58% of the total variation in partnership advantage from the distributor firm perspective. Product offering, with a path coefficient of 0.69, made the most unique contribution.