Journal article
Retail environment and manufacturer competitive intensity
Journal of retailing, v 83(2), pp 183-198
2007
Featured in Collection : UN Sustainable Development Goals @ Drexel
Abstract
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.
Metrics
Details
- Title
- Retail environment and manufacturer competitive intensity
- Creators
- Michaela Draganska - Stanford University Graduate School of Business, Stanford, CA 94305-5015, United StatesDaniel Klapper - Johann Wolfgang Goethe-Universität, Lehrstuhl für Marketing, D-60054 Frankfurt am Main, Germany
- Publication Details
- Journal of retailing, v 83(2), pp 183-198
- Publisher
- Elsevier
- Resource Type
- Journal article
- Language
- English
- Academic Unit
- Marketing
- Web of Science ID
- WOS:000246167100003
- Scopus ID
- 2-s2.0-33947577869
- Other Identifier
- 991014878276804721
UN Sustainable Development Goals (SDGs)
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- Collaboration types
- Domestic collaboration
- International collaboration
- Web of Science research areas
- Business