Author: Wang, Meng
Title: Three studies on interfirm relationships under supplier encroachment and online channel proliferation
Advisors: Gu, Fang Flora (MM)
Degree: Ph.D.
Year: 2022
Subject: Relationship marketing
Hong Kong Polytechnic University -- Dissertations
Department: Department of Management and Marketing
Pages: 135 pages : color illustrations
Language: English
Abstract: Interfirm relationship management is one of the cornerstones of a firm's marketing strategy. However, productive upstream and downstream business to business (B2B) relationships do not naturally emerge on their own. Rather, they result from effective marketing strategies, in conjunction with considerations from partner characteristics and environmental conditions. Hence, understanding how to manage different dyadic relationships (e.g., supplier-distributor relationship; manufacturer-retailer relationship) from both the upstream and downstream perspectives is critical. My dissertation enriches the interfirm relationship management literature with empirical investigation on a distributor's capability development under supplier encroachment and supply risks (Chapter1 and Chapter 2). Moreover, by examining the manufacturer-retailer power dependence through product assortment across online and offline channels, this dissertation contributes to omnichannel management literature with nuanced discussion on power shifts between dyadic (Chapter 3).
Suppliers in business-to-business (B2B) markets often directly approach end customers in addition to using third-party distribution channels. This phenomenon, known as supplier encroachment, poses an increasing challenge to the distributor's profitability in the supply chain. However, little research has adopted the distributor's perspective to examine how it can overcome this challenge. The first study addresses this gap by adopting the dynamic capability and network embeddedness theory to postulate the critical role of the distributors' customer-driving capability in tackling encroachment. Using survey data from 125 distributor firms in the semiconductor industry, I show that distributors' customer-driving capability significantly improves firm performance and that the impact strengthens when supplier encroachment is high. Moreover, I delineate the positive impacts of supplier relationship exploration, distributor relational embeddedness, and customer service excellence on distributors' customer-driving capability. Interestingly, supplier encroachment weakens the effects of supplier relationship exploration and customer service excellence but strengthens that of distributor relational embeddedness, indicating the importance of leveraging peer relationships under high supplier encroachment.
Facing the divergent supply pressures and risks from upstream suppliers, distributors need to explore the potential for obtaining supplier relationships beyond those they currently maintain. However, how different types of relationship exploration affect distributors' capability development, and thus their firm performance, remains unclear. Based on the resource features that distributors obtain, in the second study, I differentiated two forms of relationship exploration – substitute relationship exploration (SRE) and complementary relationship exploration (CRE). Drawing on the information economics perspective, I hypothesized and examined the effects of SRE and CRE on a distributor's detection capability in relationship governance with upstream suppliers and innovation capability in services to downstream customers. Using 176 distributors' replies, I find that CRE increases both detection and innovation capability, whereas SRE negatively affects detection capability and positively influences innovation capability. Finally, the effects of detection and innovation capability on distributor performance are contingent on external market uncertainty. Our study enriches the channel management literature and provides managerial implications for practitioners in the relationship exploration decision process.
In the third study, I examined how the manufacturer's product assortment across online and offline channel may affect the total brand category sales performance. Reflecting dramatic changes in distribution landscapes brought by online shopping, brand manufacturers seek to use omnichannel models to reach end-customers. However, how to manage online and offline product assortment differentiation (OOPD) to increase product sales remains a challenge: Greater OOPD might attract diverse consumer segments and cater to distinct buying behaviors and preferences, leading to expanded market coverage, but it also could increase the likelihood of multichannel misalignment at vertical (between the manufacturer and channel partners) and horizontal (across channels) levels, resulting in diminished sales. By considering both countervailing effects, the author predicts an inverted U-shaped effect on a brand manufacturer's sales performance, and by drawing on power dependence theory, I further argue that this relationship is attenuated by the manufacturer's brand positioning, innovativeness, and channel directness. A comprehensive panel data set of online and offline sales data in the home appliance industry in China offers support for the hypotheses. In highlighting the performance trade-offs associated with product assortment differentiation, this study offers some critical managerial and policy implications in omnichannel management.
Rights: All rights reserved
Access: open access

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