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The dynamic effects of power in buyer-seller relations – the process of gaining and using power to increase share of profitability
Linköping University, Department of Management and Engineering, Industrial Economics. Linköping University, The Institute of Technology.
(English)Manuscript (preprint) (Other academic)
Abstract [en]

This conceptual study contributes with an understanding of the dynamic effects of power in buyer-seller relations and how power can be used to increase share of profitability from a buyer-seller relation. It is concluded that coercive and non-coervice power bases can be used for fundamentally different purposes, but at the same time they are closely related to each other. Non-coercive power is used for achieving changes which are unresisted by the influencee, meaning that the change is welcomed by the influenced actor. As no resistance is overcome the influencer is not losing any power – it is only redistributed to other power sources. A change caused by a non-coercive power base may therefore create a coercive power base for the influencer. A coercive power base is used for achieving resisted changes, meaning that the change is unwanted by the other actor. One type of resisted change is a change in how value is shared. With this reasoning, it is concluded that an increased share of profitability is achieved through exerting power from a coercive power base. This power base can have appeared from changes caused by exertions of non-coercive power bases. By understanding the mechanisms behind how power can be used, managers are aided in their decision making and analyses of negotiating situations.

Keyword [en]
Proactive range management, business model, retail, ARA model
National Category
Economics and Business
Identifiers
URN: urn:nbn:se:liu:diva-95560OAI: oai:DiVA.org:liu-95560DiVA: diva2:636041
Available from: 2013-07-08 Created: 2013-07-08 Last updated: 2015-09-23Bibliographically approved
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
2. Supplier Integration in Category Management: A case study of the situational impact on relationship performance and interdependence
Open this publication in new window or tab >>Supplier Integration in Category Management: A case study of the situational impact on relationship performance and interdependence
2015 (English)Doctoral thesis, comprehensive summary (Other academic)
Abstract [en]

Supplier integration in category management means that a supplier takes part in the activities that are traditionally performed by retailers. These activities are the selection of which products to sell, decisions on how to price and market the products, and making sure that the products are delivered to the stores in a timely manner. Depending on the situation, an integration of suppliers in these activities can be more or less suitable.

As more research is needed to understand when supplier integration in category management is suitable, the purpose of this thesis is to describe and analyze how situational factors affect the relationship consequences of supplier integration in category management. Specifically, the relationship consequences are expressed in terms of relationship performance and interdependence between the firms.

The study builds on empirical data about British and Swedish builders’ merchants and their suppliers, with a particular focus on timber suppliers. Data has mainly been collected through participative observations and interviews.

Five situational factors that improve the relationship performance of supplier integration in category management are identified: large retailer firms, supplier product knowledge, homogeneity of market demands for the supplier’s products, mutual trust and a shared view on customer value between the supplier and retailer. Three situational factors are identified that affect the interdependence between the retailer and the supplier when supplier integration in category management is implemented: supplier product knowledge, whether the supplier or the retailer initiates the integration and whether coercive or non-coercive power has to be used in the implementation.

This thesis contributes to retail literature by highlighting the need to include situational factors in the analysis of supplier integration, clarifying which activities are comprised by category management and suggesting a theoretical foundation based on the resource-based view and the transaction cost framework to analyse relationship performance in retailer-supplier dyads. When making decisions on integration, managers of retailers and their suppliers are advised to consider the fit with their overall strategy, the fit with the surrounding situation and the effects both in terms of interdependence and relationship performance.

Place, publisher, year, edition, pages
Linköping: Linköping University Electronic Press, 2015. 118 p.
Series
Linköping Studies in Science and Technology. Dissertations, ISSN 0345-7524 ; 1705
Keyword
Supplier integration, category management, interorganizational relationships, retail
National Category
Business Administration
Identifiers
urn:nbn:se:liu:diva-121511 (URN)10.3384/diss.diva-121511 (DOI)978-91-7685-943-8 (ISBN)
Public defence
2015-11-06, A1, A-huset, Campus Valla, Linköping, 13:15 (English)
Opponent
Supervisors
Available from: 2015-09-23 Created: 2015-09-23 Last updated: 2015-11-19Bibliographically approved

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