This paper describes how supplier relationship management facilitates innovation exploitation and exploration in brewing and bus manufacturing. In the two industries examined, strong ties are associated with exploitation whilst mixed features of strong and weak ties benefit exploration. This is in contrast to the findings of Gilsing and Nooteboom (2005) and suggests that tie strength associated with exploitation and exploration differs according to the industrial context in which firms operate. The findings also suggest different streams of capabilities are required to manage supplier relationships. In exploitation strong ties facilitate capabilities to identify new opportunities, to form a collective to pool resources and to work across organisational boundaries. In exploration weak ties are conducive to the search for new ideas but impede firms’ capability to realise potential innovations. Relationship management becomes challenging when innovations are radical, with high complexity in communication and coordination of actors across organisational boundaries.
Keywords: innovation, exploitation, exploration, supplier relationship management, strong and weak ties