Danfoss drives a hard bargain with suppliers : … but may be missing out on the benefits of a “softly‐softly” approach

Purpose – Examines the relationship between Danfoss Drives, a Danish company that produces apparatus for regulating the frequencies of electrical motors, and its four suppliers of so‐called “insulated gate bipolar transistors” (IGBTs), which are a key component of these devices. Design/methodology/approach – Examines the reactions of each of the four suppliers to the Danfoss “supplier evaluation” meetings, the main aim of which seemed to be to force down prices. Findings – Discovers that only one of the four suppliers reacted positively to the Danfoss approach, and that varying degrees of resentment were present in the others. Originality/value – Highlights the potential benefits of a more collaborative approach when purchasing certain types of products.