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Implementing proactive range management – requirements on timber suppliers from a business model perspective
Linköping University, Department of Management and Engineering, Industrial Economics. Linköping University, The Institute of Technology.
Linköping University, Department of Management and Engineering, Industrial Economics. Linköping University, The Institute of Technology.
(English)Manuscript (preprint) (Other academic)
Abstract [en]

A supplier to a retailer that influences what products customers are buying, with the aim to achieve an increased cost-efficiency in the distribution channel, can be said to have a proactive range management (PRM) offering. In implementing this offering, new requirements appear for the supplier as new responsibilities appear that are usually unfamiliar for passive product suppliers. By applying a business model perspective, an effort is made to identify these new requirements. The ARA model is then used for structuring the requirements. It is concluded that the transition from being a traditional product supplier to implementing a PRM offering implies significant changes in what activities to perform, what resources to hold and what actors, or customers, to approach with the new offering. The business model construct has also appeared as useful for identifying these requirements. The managerial implication is that the decision of implementing a PRM offering and influencing the product range of customers implies major changes for the business and has to be supported by the overall structure of the firm.

Keyword [en]
Proactive range management, business model, retail, ARA model
National Category
Economics and Business
Identifiers
URN: urn:nbn:se:liu:diva-95559OAI: oai:DiVA.org:liu-95559DiVA: diva2:636037
Available from: 2013-07-08 Created: 2013-07-08 Last updated: 2013-07-08
In thesis
1. Proactive Range Management: A Timber Supplier’s Efforts to Influence the Product Assortment of Builders’ Merchants
Open this publication in new window or tab >>Proactive Range Management: A Timber Supplier’s Efforts to Influence the Product Assortment of Builders’ Merchants
2013 (English)Licentiate thesis, comprehensive summary (Other academic)
Abstract [en]

Different builders’ merchants demand a variety of products, and no effort has yet been made to coordinate these demands. Therefore, suppliers of timber to builders’ merchants are facing a problem in terms of requirements for a product range that is too extensive. Timber is a commodity product that is sold at low margins, which means that the costs of keeping such a wide range threaten the economies of scale in timber suppliers’ operations. A suggested solution to this problem is for timber suppliers to use proactive range management (PRM), meaning that the supplier influences the product assortments offered by the builders’ merchants. The purpose of this thesis is therefore to explore the concept of PRM in the dyad between a timber supplier and a builders’ merchant. To fulfil this purpose, research questions are formulated regarding the drivers and prerequisites for PRM, and how suppliers can use it.

A broad theoretical perspective that considers roles, exchanges and power is used to explore PRM. Data has been collected through a single case study of a timber supplier, its builders’ merchant customers, and the customers of the builders’ merchants.

The driver for PRM is the timber suppliers’ potential knowledge about costs and demand in the supply chain. The knowledge can be used to coordinate the supply chain, and thus increase efficiency and effectiveness; it also creates a power base for the suppliers, enabling them to increase the share of value gained from the dyads between themselves and the builders’ merchants.

There are several prerequisites for PRM to be realised. The suppliers must possess a power base in the form of knowledge about costs and demand in the supply chain, and be able to communicate the value of this knowledge. The suppliers and builders’ merchants are also required to have close relationships. Further, the builders’ merchants must trust the suppliers and be open to influence from them.

When using PRM, different degrees of influence can be exerted depending on the extent to which the prerequisites for PRM are fulfilled. In addition, suggestions on how to manage the product assortment can be either individualised for the builders’ merchant, or take the form of a more general suggestion, depending on which builders’ merchant is approached. The degree of influence and the individualisation of the suggestion create a 2x2 matrix, in which four different ways of using PRM are proposed.

Place, publisher, year, edition, pages
Linköping: Linköping University Electronic Press, 2013. 93 p.
Series
Linköping Studies in Science and Technology. Thesis, ISSN 0280-7971 ; 1609
National Category
Economics and Business
Identifiers
urn:nbn:se:liu:diva-95561 (URN)LiU-TEK-LIC 2013:43 (Local ID)978-91-7519-551-3 (ISBN)LiU-TEK-LIC 2013:43 (Archive number)LiU-TEK-LIC 2013:43 (OAI)
Presentation
2013-09-24, ACAS, hus A, Campus Valla Linköpings universitet, Linköping, 13:15 (English)
Opponent
Supervisors
Available from: 2013-07-08 Created: 2013-07-08 Last updated: 2013-08-27Bibliographically approved

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Ellström, DanielRehme, Jakob

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