Value Creation in Category Management Relationships: A Comparative Analysis

Category management is a collaborative approach between food manufacturers and retailers to manage product categories rather than individual brands. The purpose of the research is to explore value creation within category management and category partnership relationships through data resource sharing to meet changing consumer needs. Consumers are switching to unbranded label products in food retail categories for improved value. The research focuses on creating value in a collaborative relationship comparing branded and non-branded suppliers. It looks at the situation from both the manufacturer and retailer perspectives, and the pilot research findings have shown the role of the category captain is changing and becoming an integral part of the research. Category management is evolving to meet changing consumer and shopper needs. The shopper is the person who purchases the product on behalf of the final consumer. The role played by all the suppliers' is changing and the data findings are uncovering that a trusted relationship with the supplier is becoming more important than the traditional reliance on the category captain who was always seen as the most knowledgeable and trusted supplier. An understanding of retailer needs through a stronger collaborative relationship focused predominantly around the retailer strategies, along with the provision of more detailed and consumer focused insight are emerging as the secret to a long and collaborative category management relationship. Literature reviews had previously revealed the importance of data sharing from the growth in the use of technology by both the supplier and the retailer, however the interviews are starting to reveal that direct shopper feedback from face to face discussions is providing more valuable and meaningful insight to underpin the traditional quantitative data. The research methodology is taking a phenomenological stance using predominantly qualitative interviews. The pilot findings have indicated the need for deeper research using 'participant observation' by observing the supplier category manager and the retail buyer in their natural working environments, and tracing the relationship process from the activity at the supplier end through to the final meeting with the retail buyer. The author who is a newcomer to research is also completing an interview diary after each interview to assess his own performance and seek to make ongoing improvements to the interviews. There will be 20 interviews completed by Easter 2017, half with suppliers and the remainder with the full tier range of retailers. The analysis is currently in progress alongside further interviews and planned to be completed by September 2017. The final thesis write-up will be completed by December 2017, and the DBA viva planned for March 2018

Value Creation or Destruction: The Role of Private label in UK Grocery Category Management Decisions

Category management is a collaborative approach between food manufacturers and retailers to manage product categories rather than individual brands. It operates at both strategic and operational levels and seeks to create value ultimately for the consumer. The paper contributes to the literature and practice. It uses a qualitative interview study of twenty five senior practitioners and explores the role of private label products within UK grocery categories as consumers continue to switch due to lower prices and comparable quality to the traditional brands. The research also examines how private label manufacturers can create value within the category management relationship and how they can aspire to category captainship if they generate retailer specific and differentiated category strategies. The paper accepts its limitations and explains how further research in this important field of retailing is necessary to update the literature and help practitioners navigate their way through turbulent sector change

Are we strategically naïve or guided by trust and trustworthiness in cheap-talk communication?

Cheap-talk communication between parties with conflicting interests is common in many business and economic settings. Two distinct behavioral economics theories, the trust-embedded model and the level-k model, have emerged to explain how cheap talk works between human decision makers. The trust-embedded model considers that decision makers are motivated by nonpecuniary motives to be trusting and trustworthy. In contrast, the level-k model considers that decision makers are purely self-interested but limited in their ability to think strategically. Although both theories have been successful in explaining cheap-talk behaviors in separate contexts, they point to contrasting drivers for human behaviors. In this paper, we provide the first direct comparison of both theories within the same context. We show that, in a cheap-talk setting that well represents many practical situations, the two models make characteristically distinct and empirically distinguishable predictions. We leverage past experiment data from this setting to determine what aspects of cheap-talk behavior each model captures well and which model (or combination of models) has better explanatory power and predictive performance. We find that the trust-embedded model emerges as the dominant explanation. Our results, thus, highlight the importance of investing in systems and processes to foster trusting and trustworthy relationships in order to facilitate more effective cheap-talk interactions

Powerful Buyers and Merger Enforcement

Although large buyers like Walmart and Tyson Foods occupy important positions in the American economy, antitrust law remains focused on the conduct of sellers. Moreover, when mergers of buyers have been challenged, the cases have been based on a single theory – that the merger would create a dominant buyer (or group of buyers) that would exploit small, powerless suppliers. Most powerful buyers, however, face suppliers with power of their own, and in such cases, the buyers exert “countervailing power,” which can also be anticompetitive. Yet buyer mergers that reduce competition through the exercise of countervailing power are not addressed by the government’s guidelines, the leading treatises, or the case law. This article provides a comprehensive analysis of the role of buyer power in merger enforcement. It defines the types of buyer power, describes their competitive effects, and reviews an array of evidence. It also discusses the traditional approach to buyer mergers, suggesting modifications to better reflect the true dynamics of buyer power. Most important, it recommends that courts and enforcement agencies halt mergers that enhance anticompetitive countervailing power. Because many buyer combinations that increase such power are beneficial, the article identifies ten situations in which a merger that augments countervailing power would reduce competition and diminish the welfare of consumers, suppliers, or society

Powerful Buyers and Merger Enforcement

Although large buyers like Walmart and Tyson Foods occupy important positions in the American economy, antitrust law remains focused on the conduct of sellers. Moreover, when mergers of buyers have been challenged, the cases have been based on a single theory – that the merger would create a dominant buyer (or group of buyers) that would exploit small, powerless suppliers. Most powerful buyers, however, face suppliers with power of their own, and in such cases, the buyers exert “countervailing power,” which can also be anticompetitive. Yet buyer mergers that reduce competition through the exercise of countervailing power are not addressed by the government’s guidelines, the leading treatises, or the case law. This article provides a comprehensive analysis of the role of buyer power in merger enforcement. It defines the types of buyer power, describes their competitive effects, and reviews an array of evidence. It also discusses the traditional approach to buyer mergers, suggesting modifications to better reflect the true dynamics of buyer power. Most important, it recommends that courts and enforcement agencies halt mergers that enhance anticompetitive countervailing power. Because many buyer combinations that increase such power are beneficial, the article identifies ten situations in which a merger that augments countervailing power would reduce competition and diminish the welfare of consumers, suppliers, or society

The impact of labels on the competitiveness of the European food label supply chain

The report studies the impact of private labels on the competitiveness of the European food processing industry and investigates whether a system of producer indication may improve the functioning of the food supply chain. The impact is studied using economic theory and empirical and legal analysis. The study is completed with an impact assessment

Coordination Strategy of Dual-Channel Supply Chain for Fresh Product Under the Fresh-Keeping Efforts

In the context of high loss in the storage and transportation of fresh agricultural products, in order to help company make reasonable fresh-keeping decisions and reduce losses, we established a leading supplier of fresh agricultural products in two level dual channel supply chain model based on consumer utility function, and using Stackelberg game method to solve the optimal pricing and optimal fresh-keeping decision of fresh agricultural supplier and retailer under centralized decision-making and decentralized decision-making model. Research shows: (1) Under centralized decision-making model, the highest profit does not affect the cooperation and achieve complete coordination regardless of the bargaining power of the retailer; (2) High cost factor of fresh-keeping efforts makes supplier and retailer more inclined to lower prices to attract consumers. (3)The “revenue sharing + fresh-keeping cost sharing” coordination strategy provided by the supplier can increase the respective profits of both parties and achieve complete coordination of the dual-channel supply chain of fresh agricultural products

R&D incentives and spillovers in a two-industry model

This paper develops a two-industry model of R&D. A monopolist supplier sells an intermediate good to an oligopolistic buyer industry where firms compete in quantity and quality-enhancing R&D. The supplier can contribute to downstream product improvements by creating spillover knowledge which downstream firms use as a substitute for their own R&D efforts. Even if a market for R&D information fails to exist, the supplier may appropriate an indirect return on R&D for two reasons. Sufficiently high levels of spillover information lead to greater downstream product quality, and spillover information reduces the sunk cost of R&D necessary to enter the downstream industry. Both effects cause an expansion of downstream output and enhance the demand for the supplier's intermediate good. Given sufficiently strong incentives for supplier R&D, the locus of R&D shifts partially from the downstream to the upstream industry. R&D intensities, technological opportunities, and the industry structure of the downstream industry are determined endogenously. The R&D behavior of supplier and buyer firms is characterized by switching equilibria, thereby providing support for the notion of distinct technological regimes. --

Price capping in partially monopolistic electricity markets

In this paper we consider an oligopolistic market in which one firm can be monopolist on her residual demand function and derive implications on the shape of her profit function, which we show may not be concave in price. We propose a simple price-capping rule that induce the pivotal operator to compete for quantity instead of taking advantage of her monopoly. Then, we analyze the bidding behaviour of the dominant electricity producer oper- ating in the Italian wholesale power market (IPEX). This firm is vertically integrated and in many instances she acts as a monopolist on the residual demand. We find that, contrary to expectations, this pivotal firm refrains to exploit totally her unilateral market power and, therefore, bids at levels well below the cap. We discuss such a behaviour and derive implications for the setting of the price cap.Electricity auctions, capacity constraints, price cap, optimal bidding