Supplier Selection Process for New Norwegian Ventures
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The purpose of this master thesis is to explore how new Norwegian ventures, within consumer hardware, undertake the process of supplier selection. The number of new ventures within hardware development in Norway has increased drastically the last 10 years due to a decrease in the cost of of-shelf components, the growing attention to 3D-printing and crowdfunding sites such as Indiegogo and Kickstarter. These sites help early phase hardware products see the light of day. All of the above factors has resulted in an increased number of hardware ventures succeeding in the development phase and thus, they are reaching the stages where they need to find a production partner. As part of the increase in ventures there is, naturally, also an increasing number of failed attempts. The result being cautious suppliers whom are wary in regards to collaborating with new ventures. Thus the question is what the supplier selection process looks like for new ventures. A literature review is conducted to gain insight on the existing writings on the topic of supplier selection. However, due to the limited amount of existing research regarding new ventures we will, firstly, try to highlight the differences between new ventures and more established firms. Thereafter we will use our findings to explain the, assumed, effect being a young firm could have on the supplier selection process. Lastly, a framework for supplier selection process, for new ventures, is developed. The framework will be challenged by four different cases of empirical data collection, through interviewing four new ventures about the supplier selection process they had been through. The information extracted from these case companies combined with the literature review, create the basis for a thorough understanding of the process. The findings establish that the supplier selection for new ventures is a very iterative and non chronological process. The ventures move back and forth in the different phases of awareness, relationship initiation and exploration. Even though the different cases have similarities and included the same phases, none of the four venture s processes were similar. The different backgrounds of the new ventures before initiating the supplier selection process, and the impact they have on the process is therefore revealed. This being the incentive behind starting the process of looking for suppliers, the level of innovation in the product and the lack of prior knowledge about the process. These different backgrounds are antecedents that affect the supplier selection process. They increase the uniqueness and personality of each case, which are forcing the supplier selection away from the traditional quantitative models for supplier selection and moves it towards more qualitative means of evaluation.