Cooperation and competition in manufacturer-key retailer relationships: A business model perspective

The study investigates relationships between manufacturers and their key retailers in the Polish durable consumer goods industry from the manufacturer’s perspective. The importance of this topic has been growing with such global phenomena in retailing as concentration and internationalization, the emergence of mega-retailers, the growth of private brands and the rise of the Internet. The balance of this factors has led to a shift in bargaining power towards retailers. On this backdrop, the goal of this study is to examine how a manufacturer’s dependence on the key retailer shapes this relationship in terms of its cooperative/competitive dimensions, scope and outcomes, and if the dominant business models of manufacturers are moderating the focal relationship. The three types of business models include: Traditionalists (unwilling to enter into longterm partnerships despite lacking unique assets), Market Players (the most flexible of the three in choosing their partners and deciding on the scope of cooperation due to their unique assets) and Contractors (the most dependent on their business partners due to their lack of well-developed marketing functions). Data for the study were collected through a representative CATI survey of 580 manufacturers and analyzed with PLS structural equation modeling. The findings indicate that high manufacturer dependence on the key retailer can have positive impacts on manufacturers by inducing greater benefits from cooperation. This effect is the most pronounced among Traditionalists and is the least visible in Market Players, with Contractors showing intermediate effects. Some likely reasons for these positive effects include know-how transfers, extension of the distribution network, manufacturing contracts for private labels and marketing support from the key retailer