Power in distribution channels - Supplier assortment strategy for balancing power

Jakob Rehme*, Daniel Nordigården, Daniel Ellström, Daniel Chicksand

*Corresponding author for this work

Research output: Contribution to journalArticle

Abstract

This paper focuses on the move from buyer dominance toward interdependence between buyers and suppliers in a distribution channel. The paper introduces a case study collected through in-depth interviews and participative observations. It examines the relationships between a timber supplier and its customers in the builders' merchants sector. We stress the relevance of considering actions intended to change the power balance, rather than focusing only on trust. The power balance in a dyadic relationship is dynamic, and power positions need to be constantly re-evaluated. An important power resource is information asymmetry, manifested in the supplier's information about: products, regional and local demand, and the usage of the products. For practitioners, we highlight the possibility of exerting a non-coercive power resource, such as information asymmetry, in order to increase the relative power. Furthermore, being open about the power position between a buyer and a seller can foster a more efficient collaboration.

Original languageEnglish
Pages (from-to)176–187
Number of pages12
JournalIndustrial Marketing Management
Volume54
Early online date29 Jul 2015
DOIs
Publication statusPublished - Apr 2016

Keywords

  • assortment
  • distribution channels
  • information asymmetry
  • power
  • power regimes
  • resource dependence
  • supplier-retailer relationships

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