Retail environment and manufacturer competitive intensity

We study how the intensity of competition and the degree to which manufacturers enjoy market power depends on the retail environment in a given market. Past research has discussed the growing importance of retailers and the power they enjoy over manufacturers. Yet, the empirical literature to date has not determined which retail characteristics have the largest impact on competitive behavior.Our starting point is the estimation of a structural demand-and-supply model, where both consumers’ decisions and the strategic interactions between manufacturers and retailers are explicitly modeled. We identify the type of competitive behavior of manufacturers by measuring the deviation from a Bertrand-Nash equilibrium. This measure of competitive conduct is expressed as a function of key retail characteristics such as size of the retailer, its assortment depth, and category expertise.We illustrate the proposed approach using data for the ground coffee category in Germany. Our findings indicate that retail characteristics have indeed a significant effect on competitive intensity among upstream firms and on their ability to exercise market power. Hence, a manufacturer considering entry into a new market should not only take into account its competitors but also the specifics of the retail environment in this market.     

The Impact of Key Retail Accounts on Supplier Performance: A Collaborative Perspective of Resource Dependency Theory

Existing literature suggests that the increasing concentration in the retail industry is allowing powerful retailers to exploit their weaker suppliers, which causes the suppliers’ performance to suffer. This study takes a collaborative perspective of resource dependency theory and suggests that when suppliers engage in supply chain relationships with key retail account (KRA) customers, their performance may improve, depending on the varying levels of the supplier's and KRAs’ market shares. The empirical analysis of data from two large retailers, Wal-Mart and Target, and a broad cross-section of their suppliers provides ample support for most of the hypotheses set forth in this paper: Suppliers that depend on KRAs for a significant share of their total revenues relinquish some of their leverage in the marketplace, but as the KRAs gain market share, their suppliers’ performance tends to increase. Cumulatively, these results provide evidence of collaborative supplier–KRA relationships, such that a supplier's dependency on KRAs may positively affect supplier performance. This finding supports a more positive, symbiotic view of dependency, resulting in important implications for key account management, supply chain management, and retail research and practice.     

The Emergence of Cost-Based Strategies in Retailing

Cost-based retailing has evolved as a strategy for some high growth retal firms, led apparently by Wal-Mart. These firms do not margin manage in the tradition of retailing as taught in business schools. They try to lower prices and costs in the context of a systems driven organization. A series of in depth interviews with the executives of twenty-four retail chains with supermarket, drug, and/or mass merchandising formats is reported on. Some differences between cost driven and margin driven firms are delineated. Some limitations of the cost driven concept are offered along with some ramifications for the study of marketing and channels.     

Absorptive capacity development in Indonesian exporting firms: How do institutions matter?

This paper addresses how firms from an emerging market characterized by a challenging and variable institutional environment learn about internationalizing. Building on the organizational learning and institutional literatures, and the concept of absorptive capacity (AC), and using a sample of Indonesian manufacturing-sector exporters we identify two dimensions of internationalization-related AC: international market and international strategic operation. Unlike previous literature, we find that indirect, or second-hand, experience contributes more than the firm's own experience to the development of international market AC. Furthermore, the second-hand experience feeds Indonesian manufacturing exporters’ learning in both positive (e.g., buyers) and negative (e.g., suppliers and foreign multinationals in Indonesia) ways. In contrast, the development of international operation strategy AC appears to be driven internally, with minimal contribution from either first- or second-hand experience. We posit that these outcomes are influenced by the rapid and substantial changes in the domestic institutional environment faced by the Indonesian manufacturers.     

Rejuvenating Wal-Mart's reputation

Wal-Mart, the world's largest retailer, was named by Fortune as the “most admired company in America” for the years 2003 and 2004. However, these and other accolades have not quieted a chorus of critics, including organized labor, feminists, human rights activists, environmentalists, local businesses, and antisprawl activists, all of whom revile the retail giant for its business practices, resulting in a growing negative consumer perception of Wal-Mart's corporate citizenship. Wal-Mart has instituted a comprehensive nonmarket strategy to counter this criticism, employing a proactive combination of social, political, and legal strategies to manage a contentious environment that could threaten its future growth and financial success.     

Supplier price concessions: A longitudinal empirical study

The competitive nature of today’s business-to-business markets requires companies to continually look for ways to reduce costs; one of the easiest of which is to demand price reductions from suppliers. In this research, price reduction demands and the corresponding concessions given by 238 suppliers to the six major North American Automotive original equipment manufacturers during 2001–2007 are analyzed utilizing a simultaneous equation model. The three stage least squares estimates indicate that suppliers are willing to give higher price concessions when buyers align specific interfacing characteristics and processes with their suppliers so that the suppliers perceive greater opportunities for future business and profit. These results provide, for the first time, an understanding of the dynamic nature of the impact of buyer–supplier relational components on supplier price concessions.

考虑存在平行进口的跨国供应链价格竞争研究

跨境电商以及配套物流网络的快速发展致使平行进口对部分行业产生了巨大影响。通过建立三种市场权力模式下跨国制造商与本地制造商的博弈模型,本文对比分析有无灰色市场的不同模式供应链参与者的定价及利润,探析平行进口对低支付意愿市场的跨国制造商与本地制造商之间寡头竞争的影响。研究发现:市场支付意愿比值低于某一阈值时不会出现平行进口,市场权力模式和灰色市场的存在能影响跨国供应链参与者的收益多寡及定价策略;灰色市场有益于本地制造商和平行进口商,市场处于单一制造商主导模式有助于减少跨国制造商损失、增加本地制造商收益及缩减平行进口商的利润,在制造商共同主导模式下存在一个市场支付意愿比值区间,致使跨国制造商收益增加;平行进口促进还是抑制寡头供应链的价格竞争,取决于市场权力的结构形式。     

The Architecture of Core Competence

In this article, the author first surveys the explanations given by leading writers for corporate success and then goes on to sketch a definition of what he calls "meta-competence": the corporate capacity for building and sustaining core competence. Delving below the popular explanations for Wal-Mart's success, he then uses Wal-Mart to illustrate his argument.     

产品质量、议价能力与通道费

零售商通道费的产生机理和福利效应是理论界研究的热点,而零售商现有货架上的在售商品对潜在厂商交易条件的影响却少有研究。文章在货架稀缺的视角下,以包含产品质量的经典效用函数为起点,基于现实中零售商普遍采用的预付费合约和相应商务谈判过程的实际,建立了量化零售商产品质量和议价能力的渠道博弈模型,考察了通道费的产生条件、作用机制和福利效果,并探讨了预付费合约本身的现实基础和例外情况。结果表明：当预付费模式是一种刚性的制度安排时,通道费是否产生取决于零售商的议价能力和现有产品质量,只有议价能力和产品质量都很低的零售商才无法收取通道费;当零售商有能力在预付费模式和买断模式之间选择时,预付费一定实现为通道费,代理费必然不会产生。对生产商而言,通道费迫使低质量厂商退出市场,客观上起到了产品质量筛选的作用。这一筛选机制也决定了消费者福利的损益。     

Multimarket Contact and the Use of Power in Buyer–Supplier Relationships

Buyers and suppliers often have multiple business relationships with each other across different geographical and product markets, forming a potentially complex web of connections. What happens between the firms in one geographical or product market may influence their interactions in others. Prior research in strategic management has found that similar multimarket contact in horizontal relationships between competitors has important consequences for the firms’ use of market power. However, the consequences of multimarket contact in vertical buyer–supplier relationships remain unexplored. Building on resource‐advantage theory, this study proposes that multimarket contact between buyers and suppliers is linked to their respective propensity to use three types of mediated power in their relationships (i.e., reward, coercion, and legal legitimate) and that the effects of multimarket contact differ between buyers and suppliers. A vignette study with 143 purchasing managers and 137 business‐to‐business sales managers tests the developed hypotheses. The findings show that a higher level of multimarket contact encourages suppliers to use legal legitimate power to a greater extent and encourages buyers to use reward power to a greater extent but legal legitimate power to a lesser extent.     

Opportunity‐Based Strategic Orientation,Knowledge Acquisition,and Entrepreneurial Alertness: The Perspective of the Global Sourcing Suppliers in China

Taking the perspective of global sourcing suppliers in China, this paper investigates how the supplier firms acquire market and technical knowledge from the outsourcing partnerships differently based on their strategic orientations regarding the exploitation of opportunities versus resources. We find that suppliers whose strategy formulation is driven by the aggressive pursuit of valuable opportunities tend to be able to learn more from the outsourcing partners. Our results also show that market and technical knowledge acquisition of the supplier firms has a positive effect on employees’ alertness to opportunities. In addition, organizational innovativeness plays an important role in determining how effectively knowledge can be utilized by employees to identify novel opportunities.     

Generating Intrinsic Customer Value: Examples from Wal-Mart

For a variety of reasons, Wal-Mart is a transnational brand which has, at the same time, many fans and many detractors. Despite considerable criticism and opposition, the firm is accelerating in growth and retains a strong customer base. One reason for this growth and loyalty is that Wal-Mart generates intrinsic value through its brand name and brand community. Here, we highlight the latter method Wal-Mart uses to manage its brand and create value propositions by building loyalty among local community members. We provide a practical example of a special branding strategy that can be used by firms seeking innovative ways to create customer (and stakeholder) value.     

Wal-Mart Korea: Challenges of Entering a Foreign Market

Wal-Mart entered South Korea in late 1990s for its international expansion; however, IT had a major failure in this market and left Korea in 2005 as the American way of marketing did not translate well in Korea. Wal-Mart had critical shortfalls in enabling value exchange with the Korean consumers as the Korean consumers had significantly different taste and preferences compared to American consumers. Wal-Mart's Every Day Low Price (EDLP) strategy was not perceived to have the “value” in the minds of the Korean consumers, while its store locations were not strategically well positioned to create sufficient customer traffic. Wal-Mart's competitive advantage of low cost and low price was not suitable in the Korean competition and consumption context. Wal-Mart was not prepared to develop an effective localization strategy that might have stemmed from not having a clear projection of how much it was willing to invest and grow in this market. This Wal-Mart Korean case shows the importance of the compatibility of a corporate unique value proposition and strategic fit with the local market conditions.     

Trust or Hierarchy? Changing Relationships Between Large and Small Firms in France

An influential position in the contemporary study of industrial reorganisation discusses the construction of inter-firm trust as a way to adjust the organisation of firms to the flexibility required by the market. The conventional picture of the relation between large firms in France and small firms who supply them, suggests that it is very hard for them to construct such trust-based networks. Instead, it is one of atomised sub-contracting: the large firm gives very detailed specifications for the job that needs to be done, and the subcontractor executes. In recent years, however, several accounts have suggested that this arms-length relationship between larger firms and suppliers is changing.The argument of this paper is that, while the relationships between suppliers and large firms are indeed undergoing tremendous changes, the category of trust does not appear to capture the nature of these changes very well. The combined use of their market power and the political resources that large firms have at their disposal, allow them to remain the stronger partner in what always was an asymmetric power relationship. The argument is supported by detailed discussions of just-in-time delivery, quality issues and the role of the large firms in organising small firm finance.     

Explaining supplier-buyer partnerships: a dynamic game theory approach

Car manufacturers are introducing new purchasing policies in the European automotive industry. Aggregation of parts to form complete prefabricated systems is becoming the prominent way for suppliers to increase their competitiveness. This change implies new organizational arrangements between car manufacturers and suppliers to reflect a new relationship between traditionally adversarial firms. Using a game-theoretic approach, we emphasize, in this paper, that a partnership can only be accomplished, when the present uncertainty between the car manufacturer and the supplier can be drastically reduced. We show through a dynamic game construct and a case study how trust between suppliers and assemblers can be forged.     

The Adequacy of the Supply of Professional Advisory Services to Manufacturing Firms in Rural Mid Wales

The central question addressed is whether the services supplied by rural accountants and solicitors are appropriate for the needs of manufacturers in rural mid Wales and, if not, whether the rural location places manufacturers located there at a disadvantage. The research is based on face to face interviews with accountants and solicitors to identify typical services supplied. Banks are included to consider alternative sources of financial advice. Services are contrasted with specialist services provided by urban practices (relatively inaccessible to rural firms). Interviews are also conducted with manufacturing firms to establish their use o j and satisfaction with, suppliers. Contrasts are drawn with satisfaction levels recorded by firms with closer access to specialist suppliers. The research indicates that very small firms make greatest use of local services and are therefore at greater risk if there is a shortfall in the quality or quantity offinancial or legal advisory capacity available in rural Mid Wales.     

Implementation of technology and relationships to supply chain performance: apparel manufacturers' perspectives

Apparel manufacturers operate within a distribution channel with suppliers, retailers and consumers. In a competitive market, apparel manufacturers, in transactions with retailers, must make changes. These changes have potential to affect the supply chain and consequently to add or reduce value of products for the retailer. This study investigated changes in products and services associated with implementation of new technologies. A two-stage design used both a qualitative study and a quantitative study. The qualitative study with 10 industry personnel was used to develop the change variable. The quantitative study had US apparel manufacturers (n = 105) respond to a mailed survey about changes their firms had experienced. Findings indicated that implementation of Quick Response (QR) technologies when moderated by the demographics of fashion level, seasonality, and price point of the product did correspond with changes in product offerings and customer services.     

The Uses of Business History

In the 1960s small computers emerged in the United States, based on the new semiconductor technology. Originally developed for use in industrial automation, they soon began to compete with the established mainframe computers. A number of British firms entered the new market, including diversified electronic goods manufacturers, enterpreneurial start-ups, and office machinery suppliers. The Wilson government saw small computers as a central element of industrial modernisation, and thus a part of its solution to Britian's economic decline. The Ministry of Technology was given twin objectives: to support industrial modernisation and to promote the British small computer manufacturers. However, US-built systems proved more competitive, and by the mid-1970s they had come to dominate the industry, with the few remaining British firms relegated to niche markets. The paper concludes that government involvement in the industry was well-guided, but ineffectual, and that organisational cultures were to a large extent responsible for the British companies' decline.     

The Soul of the Service Economy: Wal-Mart and the Making of Christian Free Enterprise, 1929-1994

"The Soul of the Service Economy" explains the rise of Christiancorporate globalism in the twentieth century, that always unfinishedtask of sanctifying capitalism and consumption under Christianity.As the biography of the Sunbelt service sector's "free enterprise"ideology, "The Soul of the Service Economy" is not an examinationof Wal-Mart itself but an analysis of Wal-Mart's world—theinterconnected commercial, religious, and educational institutionswhich both produced the world's largest company and then dependedupon its patronage. This culture united Southwestern entrepreneurs,service providers, middle managers, students, missionaries,and even waged employees in an ethos of Christian free enterprise.On the basis of archival research in local and ephemeral sources,"The Soul of the Service Economy" uses the stories of peoplelinked through Wal-Mart and its philanthropies to understandthe shift to post-Fordist regimes in work, gender relations,education, and geography.