ABSTRACT
Traditionally, companies wishing to exercise a degree of control of the upstream or downstream elements of the value chain have followed the route of vertical integration, either through development of their own services, or through acquisition. However, these traditional routes have proven less than fully successful. The company loses the focus of its core business, often operating the other parts of the business less successfully and at greater cost than the specialists, so that instead of excelling at one task it becomes mediocre at many. Equally, it is frequently the case that overall profitability is adversely affected. Supplier development moves away from this strategy, recognising its inherent difficulties and limitations, and respecting the expertise and knowledge specific to the fulfilment of a particular need.
