The Black Widow business model serves the long term needs of an all-powerful customer.
The relationship is symbiotic. In exchange for steady work and long term viability, the Black Widow must accept conditions and requirements imposed upon it by the customer.
The danger lies in the asymmetry within the relationship. The customer needs the Black Widow far less than the Black Widow needs its dominant customer.
Wheel maker Superior Industries (NYSE: SUP) has historically depended upon Ford (NYSE: F) and General Motors (NYSE: GM) for about 85% of total revenues.
Battery maker Greatbatch (NYSE: GB) earns about 65% of its revenues from two customers: Guidant (owned by Boston Scientific (NYSE: BSX)) and St. Jude (NYSE: STJ).
Todd Shipyards (NYSE: TOD) earns 60% of its total revenues from the US government (the Navy and the Coast Guard)
Greatbatch is an interesting company. As revealed by their 10K filings, they didn't choose their Black Widow situation. The changed buying behaviors of their customers pushed GB into its now difficult position.
To improve your mastery of the types of business models: Chickens and Pigs - The Book
