Previous retailer-supplier research reports both positive and negative collaboration outcomes. Resource alignment, or how collaborating actors’ resources affect each other, is a concept that has been brought forward to explain when collaboration increases performance. As the category management of builders’ merchants involves actors with different sets of resources, the resource alignment framework can be used to better understand the outcomes of collaboration in category management. The aim of this paper is to explore resource alignment among actors involved in the category management of builders’ merchants. The paper is based on interviews with top managers in Swedish builders’ merchants. Complementary and supplementary resources held by the involved actors are identified for four distinguished category management activities. Resources needed to further improve the business are also identified. Three propositions are formulated, explaining how supplementary and complementary resources are interrelated and how the situation influences the need for supplementary resources. The description of resource alignment supports retailers and their suppliers concerning how to assign roles and responsibilities in category management activities. While the retailers themselves are often well equipped to manage pricing and inventory management, the supplier can support assortment and marketing management.
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.