Competing against an in-house supplier

A not uncommon situation in industrial marketing is for an outside supplier to find itself competing against an in-house supplier. Knowing how to compete against an in-house supplier is of importance because industrial marketing firms typically respond with one of two diametrically opposed actions: they act as if the situation is no different than competing against any other supplier, or they assume that they have no chance--and back off. Neither approach is realistic. The fact that the current supplier is in-house will not impact the probability of the outside vendor's success. Rather, it is the nature of the relationship between the buying organization and the in-house supplier that is of paramount importance in determining the likelihood of replacing an in-house supplier. This article presents a decision-process model useful for ascertaining the sales opportunity when competing against an in-house supplier. Alternative marketing strategies are also suggested.