Supply Chain Management Focusing on Relationship Building and Switching Cost

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The purpose of this study was to examine the effectiveness of the current relationship building Supply Chain Management (SCM) and Customer Relationship Management (CRM) practices which could build business partners’ loyalty in the SCM context. A proposed model was developed with variables including mutual benefits/fairness, trust, retention, loyalty, and switching cost. Previous research examined the partial relationships in the proposed model, and no research has included the switching cost with all the variables in the proposed model. The quantitative methodology involving a survey method was employed for this exploratory study. The hypothesised relationships were partially supported depending on the type of SCM. The most significant variable having an effect on the switching cost was also different depending on the type of SCM. The SCM practice applied from Human CRM (i.e. emotional connections) in a business-to-business environment was the least effective SCM for loyalty but had a significant impact on switching cost.