Analyzing the Differential Impacts of Customer Concentration on the Performance of Service and Product Firms

Abstract

The study examines the structural distinctions between service-oriented and product-oriented companies regarding the influence of customer concentration on the performance metrics of each firm type. The research posits that customer concentration may affect costs, inventory turnover, accounts payable, accounts receivable, return on assets, and gross margins differently in service firms compared to product firms. Furthermore, this paper explores the effect of major customers on firm performance. A comprehensive review of existing literature was conducted, yielding significant insights. Building on prior research findings, the study aims to delve deeper into the impact of customer concentration across various industries by identifying their structural variations.