• Negotiation with Dominant Supplier: Power Determination, Partnership, and Joint Buying

    Author(s):
    Aidar Vafin (see profile)
    Date:
    2017
    Item Type:
    Article
    Tag(s):
    Buyer’s cartel, Dominant supplier, Joint buying, Market power, partnership
    Permanent URL:
    https://doi.org/10.17613/epet-bn61
    Abstract:
    A power imbalance between the market-dominant supplier and the buyer occurs because the former has more strength and leverage to persuade the latter to come closer to their bargaining stance. Analyzing the negotiating power impacts the success rate of negotiation. This study argued that a formal analysis to determine the negotiating power of a dominant supplier must be performed before structuring negotiation strategies. This study explores various ways to determine the power of a supplier such as The Herfindahl-Hirschman Index, profit rate, and Lerner Index. The study also discussed managing and improving partnerships with a powerful supplier in planning, investment, and profit-sharing. However, when a relationship with a powerful supplier is unbalanced and against the interests of the buyer firm, a partnership with other buyer firms emerges as the last resort to combat the power of suppliers. We discussed how different the forms of the buyer's cooperation such as joint buying and buyer's cartel can decrease the negotiation power of a dominant supplier.
    Notes:
    https://scholar-publica.space/index.php/fin/article/view/14
    Metadata:
    Published as:
    Journal article    
    Status:
    Published
    Last Updated:
    2 months ago
    License:
    Attribution-NonCommercial
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