Cluster Analysis of Retailers’ Benefits from Their Cooperation with Manufacturers: Business Models Perspective
A number of studies discussed the topic of benefits of retailers-manufacturers cooperation and coopetition. However, there are only few publications focused on the benefits of cooperation and coopetition between retailers and their suppliers of durable consumer goods; especially in the context of business model of cooperating partners. This paper aims to provide a clustering approach to segment retailers selling consumer durables according to the benefits they obtain from their cooperation with key manufacturers and differentiate the said retailers’ in term of the business models of cooperating partners. For the purpose of the study, a survey (with a CATI method) collected data on 603 consumer durables retailers present on the Polish market. Retailers are clustered both, with hierarchical and non-hierarchical methods. Five distinctive groups of consumer durables’ retailers are (based on the studied benefits) identified using the two-stage clustering approach. The clusters are then characterized with a set of exogenous variables, key of which are business models employed by the retailer and its partnering key manufacturer. The paper finds that the a combination of a medium sized retailer classified as an Integrator with a chiefly domestic capital and a manufacturer categorized as a Market Player will yield the highest benefits. On the other side of the spectrum is medium sized Distributor retailer with solely domestic capital – in this case, the business model of the cooperating manufactrer appears to be irreleveant. This paper is the one of the first empirical study using cluster analysis on primary data that defines the types of cooperation between consumer durables’ retailers and manufacturers – their key suppliers. The analysis integrates a perspective of both retailers’ and manufacturers’ business models and matches them with individual and joint benefits.
Digital Object Identifier (DOI): doi.org/10.5281/zenodo.1129872Procedia APA BibTeX Chicago EndNote Harvard JSON MLA RIS XML ISO 690 PDF Downloads 685
 R. Chavhan, S.K. Mahajan, and P.J. Sarang, “Supplier development: theories and practices,” Journal of Mechanical and Civil Engineering, vol. 3, pp. 37-51, 2012.
 M. Ahmed, and L. Hendry, “Supplier development literature review and key future research areas,” International Journal of Engineering and Technology Innovation, vol. 2, pp. 293-303, 2012.
 G.P. Dapiran, and S. Hogarth-Scott, “Are cooperation and trust being confused with power? An analysis of food retailing in Australia and the UK,” International Journal of Retailing & Distribution Management, vol. 31, pp. 256-267, 2003.
 A. Cox, J, Sanderson, and W. Watson, “Power regimes: mapping the DNA of business and supply chain relationships”, earlsgatepress.com. 2000.
 D. Corsten, and N. Kumar, “Do suppliers benefit from collaborative relationships with large retailers? An empirical investigation of efficient consumer response adoption,” Journal of Marketing, vol. 69, pp. 80–94, 2005.
 M. Bengtsson, S. Hinttu, and S. Kock, “Relationships of Cooperation and Competition Between Competitors,” Paper submitted to the 19th Annual IMP Conference, September 4-6, 2003 Lugano, Switzerland, www. impgroup.org/uploads/papers/4294.pdf.
 C-S. Tsou, H-H. Fang, H-C., Lo, and C-H. Huang, “A study of cooperative advertising in a manufacturer-retailer supply chain” International Journal of Information and Management Sciences, vol. 20, pp. 15-26, 2009.
 S. Kim, N. Kim, J.H. Pae, and L. Yip, “Cooperate ‘and’ compete: coopetition strategy in retailer-supplier relationships,” Journal of Business & Industrial Marketing, vol. 28, pp. 263-275, 2013.
 Y. Li, Y. Liu, and H Liu, “Co-opetition, distributor’s entrepreneurial orientation and manufacturer’s knowledge acquisition: Evidence from China,” Journal of Operations Management, vol. 29, pp. 128-142, 2011.
 J.C. Anderson, and J.A. Narus, “Model of distributor firm and manufacturer firm,” Journal of Marketing, vol. 54, pp. 42-58, 1990.
 H. Kotzab, C. Teller, “Value-adding partnerships and co-opetition models in the grocery industry,” International Journal of Physical Distribution & Logistics Management, vol 33, pp. 268-281, 2003.
 J. Cygler, M. Aluchna, E. Marciszewska, M.K. Witek-Hajduk, and G. Materna, “Kooperencja przedsiębiorstw w dobie globalizacji. Wyzwania strategiczne, uwarunkowania prawne,” Warsaw: Wolters Kluwer, 2013.
 M.K. Witek-Hajduk, “Relacje między producentami a detalistami” in Relacje między producentami a detalistami – kontekst modeli biznesu, M.K. Witek-Hajduk Ed. Warsaw, PWN, 2016, pp. 45-90.
 P. Buxmann, A. von Ahsen, and L.M. Diaz, “Economic evaluation of cooperation scenarios in supply chains,” Journal of Enterprise Information Management, vol. 21, pp. 247-262, 2008.
 P. Trkman, M. Budler, and A. Groznik, “A business model approach to supply chain management,” Supply Chain Management: An International Journal, vol. 20, pp. 587-602, 2015.
 I.P. Vlachos, M. Bourlakis, and V. Karalis, “Manufacturer–retailer collaboration in the supply chain: empirical evidence from the Greek food sector,” International Journal of Logistics Research and Applications, vol. 11, pp. 267–277, 2008.
 C.S.F. Chow, E. Kaynak, and C.J. Yang, “Channel power struggle between a manufacturer giant and a retailer giant in China: Who is the winner?,” Competitiveness Review: An International Business Journal, vol. 2, pp. 306-321, 2011.
 J. Wiechoczek, and K. Bilińska-Reformat, “The cooperation of international retail chains with suppliers of non-food private label products,” International Marketing Trends Conference, (online access on 15.02.2016), http://www.marketing-trends-congress.com/archives/2016/pages/PDF/WIECHOCZEK_BILINSKA-REFORMAT.pdf
 R. Terpend, B.B. Tyler, D.R. Krause, and R.B. Handfield, “Buyer-supplier relationships: derived value over two decades,” Journal of Supply Chain Management, vol. 44, pp. 28-55, 2008.
 J.H. Dyer, and H. Singh, “The relational view: cooperative strategy and sources of interorganizational competitive advantage,” Academy of Management Review, vol. 23, pp. 660-679, 1998.
 G. Svensson, “The theoretical foundation of supply chain management: A functionalist theory of marketing,” International Journal of Physical Distribution & Logistics Management, vol. 32, pp. 734-754, 2002.
 P.D. Larson, “An empirical study of inter-organizational functional integration and total costs,” Journal of Business Logistics, vol. 15, pp. 153-69, 1994.
 K.W. Artz, “Buyer-supplier performance: the role of asset speciﬁcity, reciprocal investments and relational exchange,” British Journal of Management, vol. 10, pp. 113-126, 1999.
 A. Parkhe, “Strategic alliance structuring: a game theoretic and transaction cost examination of interﬁrm cooperation,” Academy of Management Journal, vol. 36, pp. 794-829, 1993.
 M.K. Witek-Hajduk, and A. Napiórkowska, “A framework of manufacturer-retailer cooperation and coopetition: a perspective of six consumer durables manufacturers,” Kwartalnik Naukowy Organizacja i Zarządzanie Wydawnictwo Politechnika Śląska, 2016.
 V. Grover, J. Teng, and K. Fiedler, “Investigating the role of information technology in building buyer-supplier relationships,” Journal of Association for Information Systems, vol. 3, pp. 217-245, 2002.
 E. Tuusjarvi, and K. Moeller, “Multiplicity of norms in inter-company cooperation,” Journal of Business & Industrial Marketing, vol. 24, pp. 519-528, 2009.
 E. Pereira, Z. Brito, and G. Mariotto, “Benefits of cooperation between buyers and providers: a study in the field of information and communications technology,” Review of Business Management, vol. 15, pp. 241-261, 2013.
 K. Hewett, and W.O. Bearden, “Dependence, trust, and relational behavior on the part of foreign subsidiary marketing operations: implications for managing global marketing operations,” Journal of Marketing, vol. 65, pp. 51-66, 2001.
 J.B. Heide, and G. John, “Alliances in industrial purchasing: the determinants of joint action in buyer-supplier relationships,” Journal of Marketing Research, vol. 27, pp. 24-36, 1990.
 K. Nolan, “The pursuit of distinction,” Retailing Today, vol. 46, 9 April, p. 33, 2007.
 P.J. Singh, and D. Power, “The nature and effectiveness of collaboration between IRMS, their customers and suppliers: a supply chain perspective,” Supply Chain Management: An International Journal, vol. 14, pp. 189-200, 2009.
 M.S. Togar, and R. Sridharan, “The collaborative supply chain,” International Journal of Logistics Management, vol. 13, pp. 15-30, 2002.
 T.M. Simatupang, and R. Sridharan, “The collaborative supply chain,” International Journal of Logistics Management, vol. 13, pp. 15-30, 2002.
 E. Brynjolfsson, and L.M. Hitt, “Computing productivity: firm-level evidence,” Review of Economics and Statistics, vol. 85, pp. 793–808, 2003.
 P. D. Larson, and J.D. Kulchitsky, “The use and impact of communication media in purchasing and supply management,” Journal of Supply Chain Management, vol. 5, pp. 29-37, 2000.
 R.W. Palmatier, R.P. Dant, D. Grewal, and K.R. Evans, “Factors influencing the effectiveness of relationship marketing: a meta-analysis,” Journal of Marketing, vol. 70, pp. 136-153, 2006.
 N. Kumar, L.K. Scheer, and J-B.E.M. Steenkamp, “The effects of perceived interdependence on dealer attitudes,” Journal of Marketing Research, vol. 32, pp. 348-356, 1995.
 P.J. Daugherty, R.G. Richey, A.S. Roath, S. Min, H. Chen, A.D. Arndt, and S.E. Genchev, “Is collaboration paying off for firms?,” Business Horizons, vol. 49, pp. 61-70, 2006.
 H. Tikkanen, J. Lamberg, P. Parvinen, and J. Kallunki, “Managerial cognition, action and the business model of the firm,” Management Decision, vol. 46, pp. 789-809, 2005.
 J. Kallio, M. Tinnila, and A. Tseng, “An international comparison of operator-driven business models,” Business Process Management Journal, vol. 12, pp. 281-298, 2006.
 J. Magretta, “Why business models matter?,” Harvard Business Review, vol. 5, pp. 86-92, 2002.
 A. Osterwalder, Y. Pigneur, and C. Tucci, “Clarifying business models,” Communications of AIS, 2005.
 B. Andersson, M. Bergholtz, A. Edirisuriya, I. Ilayperuma, P. Johannesson, B. Grégoire, M. Schmitt, E. Dubois, S. Abels, A. Hahn, J. Gordijn, H. Weigand, and B. Wangler, “Towards a reference ontology for business models,” Proceedings of the 25th International Conference on Conceptual Modeling (ER2006), 6–9 November, pp. 1–16., 2006.
 P. Timmers, “Business models for electronic commerce,” Electronic Markets, vol. 2, pp. 3-8, 1998.
 M. Rappa, “Managing the digital enterprise: Business models on the web,” North Carolina State University, http://digitalenterprise.org/models/models.html. 2002.
 J.C. Linder, and S. Cantrell, “Five business-model myths that hold companies back,” Strategy and Leadership, vol. 6, pp. 13-18, 2001.
 A.J. Slywotzky, D. Morrison, and B. Andelman, “Strefa zysku. Strategiczne modele działalności,” Warsaw: PWE, 2000.
 J. Kallio, M. Tinnila, and A. Tseng, “An international comparison of operator-driven business models,” Business Process Management Journal, vol. 12, pp. 281-298, 2006.
 T. Gołębiowski, T. Dudzik, M. Witek-Hajduk, “Modele biznesu – aspekty teoretyczne,” in Modele biznesu polskich przedsiębiorstw, T. Gołębiowski, T. Dudzik, M. Lewandowska, M. Witek-Hajduk, Ed., Warsaw: SGH Publishing Office, 2008.
 R.M. Grant, “Supplier-retailer relations: The shifting balance of power” in: Business Strategy and Retailing, G. Johnson, Ed. Chichester: John Wiley & Sons, 1987, pp. 43-58.
 J.A. Dawson, and S.A. Shaw, “The changing character of supplier-retailer relationships,” in: Retail Distribution Management, J. Fernie, Ed. London: Kogan Page, 1990, pp. 19-39.
 E. Ogbonna, and B. Wilkinson, “Inter-organizational power relations in the UK grocery industry: contradictions and developments,” The International Review of Retail, Distribution and Consumer Research, vol. 6, pp. 395-414, 1996.
 S. Burt, and L. Sparks, “Power and competition in the UK retail grocery market,” British Journal of Management, vol. 14, pp. 237-254, 2003.
 H. Meffert, and M. Bruhn “Markenstrategien im Wettbewerb,” Gabler: Wiesbaden, 1984.
 M. Landler, Z. Schiller, and L. Therrien, “What’s in a name? Less and less,” Business Week, vol. 8, pp. 66, 1991.
 D.A. Soberman, and P.M. Parker, “The economics of quality-equivalent store brands,” International Journal of Research in Marketing, vol. 23, pp. 125-139, 2006.
 R. Chimhundu, “Private label marketing performance: an analysis of historical trends using theories of cumulative change and punctuated equilibrium,” International Journal of Business and Management, vol. 6, pp. 58-65, 2011.
 H. Kotzab, and P. Schnedlitz, “Retailing, don’t forget it in your supply chain management concept,” Journal für Betriebswirtschaft, vol.4, pp. 140-153, 1999.
 K. Seiders, L.L. Berry, and L.G. Gresham, “Attention retailers! How convenient is your convenience strategy?,” Sloan Management Review, vol. 41, pp. 79-89, 2000.
 J.B. Heide, “Plural governance in industrial purchasing,” Journal of Marketing, vol. 67, pp. 18-29, 2003.
 M. Porter, “Interbrand choice, strategy and bilateral market power,” Cambridge: Harvard University Press, 1976.
 P.C. Verhoef, E.J. Nijssen, and L.M. Sloot, “Strategic reactions of national brands manufacturers towards private labels. An empirical study in The Netherlands,” European Journal of Marketing, vol. 36, pp. 1309-1326, 2002.
 T.M. Dudzik, M.K. Witek-Hajduk, “Typologia modeli biznesu,” Gospodarka Materiałowa i Logistyka, vol. 9, pp. 18-23, 2007.
 B. Swoboda, N.A. Pop, and D.C. Dabija, “Vertical alliances between retail and manufacturer companies in the fashion industry,” Amfiteatru Economic, vol. 12, pp. 634-649, 2010.
 K. Sudhir, and D. Talukdar, “Does store brand patronage improve store patronage?,” Review of Industrial Organization, vol. 24, pp. 143-160, 2004.
 F. Scott-Morton, and F. Zettelmeyer, “The strategic positioning of store brands in retailer manufacturer negotiations,” Review of Industrial Organization, vol. 24, pp. 161-194, 2004.
 T. Liu, and C. Wang, “Factors affecting attitudes towards private labels and promoted brands,” Journal of Marketing Management, vol. 34, pp. 283-298, 2008.
 J-B. Steenkamp, and M. Dekimpe, “The increasing power of private labels: building loyalty and market share,” Long Range Planning, vol. 30, pp. 917-930, 1997.
 M. Corstjens, and R. Lal, “Building store loyalty through private labels,” Journal of Marketing Research, vol. 37, pp. 281-291, 2000.
 A-S., Binninger “Exploring the relationships between retail brands and consumer store loyalty,” International Journal of Retail & Distribution Management, vol. 36, pp. 94-110, 2008.
 S. Hoch, and J. Banerji, “When do private labels succeed,” Sloan Management Reviewed, vol. 34, pp. 57-67, 1993.
 K. Hansen, V. Singh, and P. Chintagunta, “Understanding store-brand purchase behavior across categories,” Marketing Science, vol. 25, pp. 75-90, 2006.
 C. Narasimhan, and R.D. Wilcox, “Private labels and the channel relationship: a cross-category analysis,” The Journal of Business, vol. 71, pp. 573-600, 1998.
 C. Bontemps, V. Orozco, and V. Requillart, “Private labels, national brands and food prices,” Review of Industrial Organization, vol. 33, pp. 1-22, 2008.
 S. Sayman, S.J. Hoch, and J. Raju, “Positioning of store brands,” Marketing Science, vol. 21, pp. 129-141, 2002.
 J. Anselmsson, and U. Johansson, “Corporate social responsibility and the positioning of grocery brands,” International Journal of Retail & Distribution Management, vol. 35, pp. 835-856, 2007.
 S. Kiliç, and M.H. Altintas, “Strategic using of private labels from retailers’ perspective in turkey,” Ankara Universitesi Sbf Dergisi, vol. 64, pp. 154-173, 2010.
 T. Gołębiowski, T.M. Dudzik, M. Lewandowska, and M.K. Witek-Hajduk, “Modele biznesu polskich przedsiębiorstw,” Warsaw: SGH Publishing Office, 2008.
 C. Bozarth, and R. Handfield, “Wprowadzenie do zarządzania operacjami i łańcuchem dostaw”, Gliwice: Helion, 2007.
 S. Kurnia, and R.B. Johnston, “Adoption of efficient consumer response: Key issues and challenges in Australia,” Supply Chain Management: An International Journal, vol. 8, pp. 251-262, 2003.
 H. Park, “US retailers’ cooperation with manufacturer promotional support,” Journal of Fashion Marketing and Management, vol. 8, pp. 412-424, 2004.
 Z. Huang, and S.X. Li, “Coordination and cooperation in manufacturer–retailer supply chains. Data mining and knowledge management,” Lecture Notes in Computer Science, 3327, Chinese Academy of Sciences Symposium CASDMKM, Beijing, China, July 12-14, pp. 174-186, 2004, http://link.springer.com/chapter/10.1007%2F978-3-540-30537-8_19#page-1.
 D.B. Arnett, D.A. Laverie, and J.B. Wilcox, “A longitudinal examination of the effects of retailer- manufacturer brand alliances: the role of perceived fit,” Journal of Marketing Management, vol. 26, pp. 5-27, 2010.
 S. D. Hunt, D.B. Arnett, and S. Madhavaram, “The explanatory foundations of relationship marketing theory,” Journal of Business and Industrial Marketing, vol. 21, pp. 72-87, 2006.
 R. Vaidyanathan, and P. Aggarwal, “Strategic brand alliances: implications of ingredient branding for national and private label brands,” Journal of Product & Brand Management, vol. 9, pp. 214-228, 2000.
 M. Sarstedt, and E. Mooi, “A concise guide to market research,” Berlin: Springer, 2014.
 C. Schmoltzi, and C.M. Wallenburg, “Horizontal cooperations between logistics service providers: motives, structure, performance,” International Journal of Physical Distribution & Logistics Management, vol. 41, pp. 552-575, 2011.
 C.V. Trappey, A.J.C. Trappey, A-C. Chang, and A.Y.L. Huang, “Clustering analysis prioritization of automobile logistics services,” Industrial Management & Data Systems, vol. 110, pp. 731-743, 2010.
 M. Sarstedt, and E. Mooi, “A concise guide to market research”, Berlin: Springer, 2011.
 B. Welch, “On the comparison of several mean values: An alternative approach,” Biometrika, vol. 38, pp. 330-336, 1951.
 A. Field, “Discovering statistics using SPSS,” SAGE Publications Ltd., 2009.
 W.H. Kruskal, and W.A. Wallis, “Use of ranks in one-criterion variance analysis”, Journal of the American Statistical Association, vol. 47, pp. 583-621, 1952.