A research on prediction of inter-firm relationships

The formation of successful corporate strategy among vertically integrated organizations is predicated upon a plethora of dynamic relationships among buyer-seller firms. Albeit growing in interest, there is a paucity of research that focuses on predicting the nature of inter-firm relationships among Japanese keiretsu members. Discerning this knowledge can help formulate successful strategic decisions, such as whether to continue procuring parts or increasing future investments in partner firms. As studies on prediction of inter-firm relationships have been sparse, this research offers insights by showing a newer approach for making decisions regarding corporate strategy. Using data collected on transaction from Yokokai—parts suppliers of Mazda—in this study a new model is developed to forecast inter-firm relationship using degree index and DEA model. The main contribution of this research shows that prediction of inter-firm relationship is not only depends on future trends, but also determined by the interactive relationships among member firms of a keiretsu.