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Ankit Anand - One of the best experts on this subject based on the ideXlab platform.
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assessing the impact of Customer concentration on initial public offering and balance sheet based outcomes
Journal of Marketing, 2017Co-Authors: Alok R Saboo, V Kumar, Ankit AnandAbstract:AbstractUsing the notion of Customer concentration, the authors argue that firms should evenly spread their revenues across their Customers, rather than focusing on a few Major Customer relationships. Prior literature suggests that Major Customers improve efficiency and provide access to resources, thereby producing positive performance outcomes. However, building on industrial organizational literature and modern portfolio theory, the authors argue that concentration of revenues reduces the supplier firm’s bargaining power relative to its Customers and hurts the ability of the supplier firm to appropriate value, which, in turn, hurts profits. Using a sample of 1,023 initial public offerings (IPOs) and robust econometric methods, they find that Customer concentration reduces investor uncertainty and positively impacts IPO outcomes, but significantly hurts balance sheet–based outcomes (e.g., profitability). The results suggest that a 10% increase in Customer concentration reduces profitability by 3.35% (or...
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Assessing the Impact of Customer Concentration on Initial Public Offering and Balance Sheet–Based Outcomes:
Journal of Marketing, 2017Co-Authors: Alok R Saboo, V Kumar, Ankit AnandAbstract:AbstractUsing the notion of Customer concentration, the authors argue that firms should evenly spread their revenues across their Customers, rather than focusing on a few Major Customer relationships. Prior literature suggests that Major Customers improve efficiency and provide access to resources, thereby producing positive performance outcomes. However, building on industrial organizational literature and modern portfolio theory, the authors argue that concentration of revenues reduces the supplier firm’s bargaining power relative to its Customers and hurts the ability of the supplier firm to appropriate value, which, in turn, hurts profits. Using a sample of 1,023 initial public offerings (IPOs) and robust econometric methods, they find that Customer concentration reduces investor uncertainty and positively impacts IPO outcomes, but significantly hurts balance sheet–based outcomes (e.g., profitability). The results suggest that a 10% increase in Customer concentration reduces profitability by 3.35% (or...
V Kumar - One of the best experts on this subject based on the ideXlab platform.
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assessing the impact of Customer concentration on initial public offering and balance sheet based outcomes
Journal of Marketing, 2017Co-Authors: Alok R Saboo, V Kumar, Ankit AnandAbstract:AbstractUsing the notion of Customer concentration, the authors argue that firms should evenly spread their revenues across their Customers, rather than focusing on a few Major Customer relationships. Prior literature suggests that Major Customers improve efficiency and provide access to resources, thereby producing positive performance outcomes. However, building on industrial organizational literature and modern portfolio theory, the authors argue that concentration of revenues reduces the supplier firm’s bargaining power relative to its Customers and hurts the ability of the supplier firm to appropriate value, which, in turn, hurts profits. Using a sample of 1,023 initial public offerings (IPOs) and robust econometric methods, they find that Customer concentration reduces investor uncertainty and positively impacts IPO outcomes, but significantly hurts balance sheet–based outcomes (e.g., profitability). The results suggest that a 10% increase in Customer concentration reduces profitability by 3.35% (or...
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Assessing the Impact of Customer Concentration on Initial Public Offering and Balance Sheet–Based Outcomes:
Journal of Marketing, 2017Co-Authors: Alok R Saboo, V Kumar, Ankit AnandAbstract:AbstractUsing the notion of Customer concentration, the authors argue that firms should evenly spread their revenues across their Customers, rather than focusing on a few Major Customer relationships. Prior literature suggests that Major Customers improve efficiency and provide access to resources, thereby producing positive performance outcomes. However, building on industrial organizational literature and modern portfolio theory, the authors argue that concentration of revenues reduces the supplier firm’s bargaining power relative to its Customers and hurts the ability of the supplier firm to appropriate value, which, in turn, hurts profits. Using a sample of 1,023 initial public offerings (IPOs) and robust econometric methods, they find that Customer concentration reduces investor uncertainty and positively impacts IPO outcomes, but significantly hurts balance sheet–based outcomes (e.g., profitability). The results suggest that a 10% increase in Customer concentration reduces profitability by 3.35% (or...
Mark J. Kohlbeck - One of the best experts on this subject based on the ideXlab platform.
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Investor valuations of suppliers' Major Customer disclosures☆☆☆
Advances in Accounting, 2011Co-Authors: Mark J. KohlbeckAbstract:Abstract I investigate whether or not investors in suppliers to retailers find the Major Customer disclosure value-relevant. Major Customer retailers have buyer power because the retailer represents a significant portion of a supplier's sales. Buyer power can indicate reliance on one Customer where the supplier is at a disadvantage in negotiating transaction terms. Alternatively, the existence of Major Customers may suggest the supplier is in a mutually-benefiting partnership with the retailer. I hypothesize that investors find the Major Customer disclosure value-relevant; however, the direction depends on whether the investor focuses on the partnership aspect or sales concentrated with one Customer. My valuation results are consistent with investors focusing on the sales concentration for larger suppliers (higher risk) and the mutually benefiting partnership for smaller suppliers (lower risk). The findings provide insight on valuation implications of having and disclosing a Major Customer.
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Effects of the Existence and Identity of Major Customers on Supplier Profitability: Is Wal-Mart Different?
Journal of Management Accounting Research, 2009Co-Authors: Marty Gosman, Mark J. KohlbeckAbstract:ABSTRACT: We investigate how buyer power in the retail market affects suppliers' profitability. Buyer power exists when suppliers depend on a concentrated set of retailers. Further, Wal‐Mart, the world's largest retailer, possesses additional buyer power because it has a dominant position in many product supply chains, advanced inventory management practices, and cutting edge technology. We form a sample of firms that supply retailers and utilize the Major Customer disclosure (SFAS No. 131) to proxy for dependence on Major Customers and the incremental Wal‐Mart effect associated with buyer power. We find that as sales to Major Customers increase, supplier gross margins and return on assets decrease while their inventory and payables management improves. Wal‐Mart is incrementally associated with increasing gross margins, improving cash collections, and extended payment terms with its vendors. Supplier power offsets some of the adverse effects. Our findings provide insight on financial implications of suppl...
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The Effects of Wal-Mart on the Profitability and Investor Valuation of its Suppliers
SSRN Electronic Journal, 2006Co-Authors: Marty Gosman, Mark J. KohlbeckAbstract:The U.S. retail market exhibits increasing buyer concentration among larger retailers. As a result, the increasing clout may enable larger retailers to dictate terms from their suppliers. We utilize the Major Customer disclosure (SFAS 131) and focus on 150 suppliers who identify Wal-Mart as a Major Customer. We find that supplier gross margins increase, while return on assets deteriorates. Days' sales in inventory lengthened as expected; however, the effect was offset by an increase in days' purchases in accounts payable. We also observe negative valuation implications separate from the effects of lower earnings that are consistent with greater risk for suppliers from their Wal-Mart relationship. Supplier power mitigates some of the negative effects. The findings provide insight on financial and valuation implications of supply chain dynamics where one firm has an economic dependence upon a Major Customer.
Alok R Saboo - One of the best experts on this subject based on the ideXlab platform.
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assessing the impact of Customer concentration on initial public offering and balance sheet based outcomes
Journal of Marketing, 2017Co-Authors: Alok R Saboo, V Kumar, Ankit AnandAbstract:AbstractUsing the notion of Customer concentration, the authors argue that firms should evenly spread their revenues across their Customers, rather than focusing on a few Major Customer relationships. Prior literature suggests that Major Customers improve efficiency and provide access to resources, thereby producing positive performance outcomes. However, building on industrial organizational literature and modern portfolio theory, the authors argue that concentration of revenues reduces the supplier firm’s bargaining power relative to its Customers and hurts the ability of the supplier firm to appropriate value, which, in turn, hurts profits. Using a sample of 1,023 initial public offerings (IPOs) and robust econometric methods, they find that Customer concentration reduces investor uncertainty and positively impacts IPO outcomes, but significantly hurts balance sheet–based outcomes (e.g., profitability). The results suggest that a 10% increase in Customer concentration reduces profitability by 3.35% (or...
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Assessing the Impact of Customer Concentration on Initial Public Offering and Balance Sheet–Based Outcomes:
Journal of Marketing, 2017Co-Authors: Alok R Saboo, V Kumar, Ankit AnandAbstract:AbstractUsing the notion of Customer concentration, the authors argue that firms should evenly spread their revenues across their Customers, rather than focusing on a few Major Customer relationships. Prior literature suggests that Major Customers improve efficiency and provide access to resources, thereby producing positive performance outcomes. However, building on industrial organizational literature and modern portfolio theory, the authors argue that concentration of revenues reduces the supplier firm’s bargaining power relative to its Customers and hurts the ability of the supplier firm to appropriate value, which, in turn, hurts profits. Using a sample of 1,023 initial public offerings (IPOs) and robust econometric methods, they find that Customer concentration reduces investor uncertainty and positively impacts IPO outcomes, but significantly hurts balance sheet–based outcomes (e.g., profitability). The results suggest that a 10% increase in Customer concentration reduces profitability by 3.35% (or...
Gulsah Pamuk - One of the best experts on this subject based on the ideXlab platform.
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Research on the Breaking and Tearing Strengths and Elongation of Automobile Seat Cover Fabrics
Textile Research Journal, 2009Co-Authors: Gulsah Pamuk, Fatma CekenAbstract:The automotive industry is a Major Customer of the technical textiles market. In this industry, seat covers are the most important application area of technical textiles. As the Customer demands increase and competition among original equipment manufacturers (OEMs) becomes more intense, the test standards for technical textiles are gradually being raised and becoming more thorough. Higher breaking and tearing strengths and breaking elongation are specifications required for advanced seat covers. It is a fact that deficiencies in these specifications have some effect on field returns (the return of failed cars to field service), raising costs and loss of confidence in the product and the producer. This paper investigates breaking and tearing strengths, and breaking elongation performances of the technical textiles used for automobile seat covers. The fabrics used in this research were supplied from seat cover fabric manufacturers who produce these fabrics for multinational automotive companies. The data ob...
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research on the breaking and tearing strengths and elongation of automobile seat cover fabrics
Textile Research Journal, 2009Co-Authors: Gulsah Pamuk, Fatma CekeAbstract:The automotive industry is a Major Customer of the technical textiles market. In this industry, seat covers are the most important application area of technical textiles. As the Customer demands increase and competition among original equipment manufacturers (OEMs) becomes more intense, the test standards for technical textiles are gradually being raised and becoming more thorough. Higher breaking and tearing strengths and breaking elongation are specifications required for advanced seat covers. It is a fact that deficiencies in these specifications have some effect on field returns (the return of failed cars to field service), raising costs and loss of confidence in the product and the producer. This paper investigates breaking and tearing strengths, and breaking elongation performances of the technical textiles used for automobile seat covers. The fabrics used in this research were supplied from seat cover fabric manufacturers who produce these fabrics for multinational automotive companies. The data ob...
