A business is part of a complex ecosystem of dependencies. It depends on its suppliers for good quality inputs, delivered on time at a reasonable price. It depends on its customers to purchase its products at a profitable price. These are just some of the more obvious examples among dozens that involve employees, regulatory bodies, financers, and community groups. Any weak link in the chain represents a business risk.
The Dangers of Becoming Too Dependent on a Single Customer
How to prevent a key stakeholder from holding too much power.
November 06, 2023
Summary.
In managing customer relationships — or relationships with any key stakeholders — it is critical to manage the balance of power between the company and any one customer. This can be done by diversifying the customer base, understanding (and be willing to use) customer pressure points, and (in the case where a company is locked into a single key relationship) to ensure that the customer is as dependent on the company as the company is dependent on the customer.
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New!
HBR Learning
Strategy Planning and Execution Course
Accelerate your career with Harvard ManageMentor®. HBR Learning’s online leadership training helps you hone your skills with courses like Strategy Planning and Execution. Earn badges to share on LinkedIn and your resume. Access more than 40 courses trusted by Fortune 500 companies.
How to develop a winning strategy—and put it to work.