abstract: While scan-based trading (SBT) is a growing trend in the retail industry, evidence suggests that many SBT initiatives have contributed only to the retailers’ bottom line at the suppliers’ expense. This research attempts to disclose some of the causes of SBT failure as a collaborative inventory management initiative and identify SBT’s integrative potential using both positivistic and normative research methodologies. In the first chapter, SBT contracts are analyzed through the lens of Agency Theory. By focusing on unique inventory ownership and risks considerations resulting from retailers managing supplier-owned inventory without bearing the cost of inventory shrinkage, the effect of SBT on inventory shrinkage is examined empirically using a data set from a packaged bakery manufacturer. The results show that inventory shrinkage tends to be higher under SBT contracts compared to traditional vendor-managed inventory (VMI) contracts. The study highlights a potential loss in efficiency in food supply chains reflected in higher shrinkage under SBT contracts. The second chapter aims to identify conditions under which SBT contracts could be mutually beneficial for retailers and suppliers. Using stylized game theoretic models involving a retailer and a supplier of a product with limited shelf life, the study finds that, while inventory shrinkage may be amplified under SBT contracts compared to VMI contracts due to the decreased retailer’s incentive to manage inventory at the store, SBT could help suppliers minimize inventory overage and underage under high demand uncertainty. The integrative potential for SBT contracts, thus, lies in the trade-off between inventory shrinkage and forecasting accuracy. In the third paper, the role of bargaining power on the performance of SBT contracts is examined. Based on the bargaining literature, it is hypothesized that perceptions of bargaining power can be reshaped in the bargaining process through concession tactics. The results of a negotiation experiment show that, while powerful retailers do tend to have the upper hand in negotiating SBT contracts, weak suppliers could ameliorate or even overcome retailer power by offering services as a concession in a way that the product-service bundle improves the value of their offerings in the eyes of the retailers. / Dissertation/Thesis / Doctoral Dissertation Business Administration 2016

<p>Background: The recent years in the Swedish Fast Moving Consumer Goods industry have been characterized by a palpable shift in power balance, favouring the retailers. Since the shift in power balance has strengthened the negotiation position of the retailers, the suppliers now have to, to a greater extent than before, accommodate to the retailers’ goals, whether they be financial or strategic. </p><p>Purpose: The aim of this study was to investigate how this recent power shift has affected the relationships of suppliers and retailers. This development has resulted in the rather new and unexplored area of retailer value, which this study further aimed to explore. </p><p>Research method: Interviews were conducted with representatives fromthe leading retailer chains and market leading suppliers. </p><p>Results: The increased use of information and control on behalf of the retailers has led to the suppliers, to a greater extent than before, having to adjust to the retailers'different store concepts. However, in order to create retailer value, the suppliers also need to focus on the consumers’ needs and preferences, since the way to the retailer’s shelves is through creating consumer demand. They also have to stay innovative and make use of the experience and in-depth knowledge they possess within their product segments, as that is where they still have the upper hand.</p>

Background: The recent years in the Swedish Fast Moving Consumer Goods industry have been characterized by a palpable shift in power balance, favouring the retailers. Since the shift in power balance has strengthened the negotiation position of the retailers, the suppliers now have to, to a greater extent than before, accommodate to the retailers’ goals, whether they be financial or strategic. Purpose: The aim of this study was to investigate how this recent power shift has affected the relationships of suppliers and retailers. This development has resulted in the rather new and unexplored area of retailer value, which this study further aimed to explore. Research method: Interviews were conducted with representatives fromthe leading retailer chains and market leading suppliers. Results: The increased use of information and control on behalf of the retailers has led to the suppliers, to a greater extent than before, having to adjust to the retailers'different store concepts. However, in order to create retailer value, the suppliers also need to focus on the consumers’ needs and preferences, since the way to the retailer’s shelves is through creating consumer demand. They also have to stay innovative and make use of the experience and in-depth knowledge they possess within their product segments, as that is where they still have the upper hand.