Development of Manufacturer-Retailer Networks

Stefanos Mouzas, 1999

This thesis deals with contemporary developments in manufacturer-retailer networks. Its empirical basis is defined by 15 embedded case studies of interorganisational networks in the markets of fast-moving consumer goods in Germany. Following a theoretical review, the study employs a conceptual framework for the study of network developments that differs from the traditional models used in the marketing channels literature. The framework presents the network developments from three different perspectives. The first perspective is related to the development of business processes, the second is linked to the development of competitive and co-operative relationships, and the third includes the development of organisational structures. The three perspectives do not exist in isolation. Instead, there is an inherent dynamic interplay among processes, relationships and structures. The conceptual framework creates a new meaning which is not simply content-based, but has epistemological and ontological underpinnings.

The epistemological foundation of this study can be defined as critical realism, while its ontology is determined by the network approach that treats markets as interconnected networks of organisations buying and organisations selling. This allows us to emphasise change dynamics and interdependence among manufacturers and retailers. In emphasising the interdependence between vertical and horizontal relationships in manufacturer-retailer networks, we depart significantly 1) from traditional open systems studies that emphasise the mirroring external complexities in the organisation's environment, and 2) from the recent trend in the management studies literature to study interfirm rivalry as the sequence of tactical and strategic moves and countermoves. Instead, the thrust of the thesis lies in the consideration of network developments as the outcome of an ongoing process by manufacturers and retailers as they relate to each other. The actors construct the forms in which the environmental information appears; they interpret and react to a set of contingencies differently, implement pilot projects in dyadic relationships to test the feasibility of new ideas and attempt to mobilise other actors in their initiatives, thus diffusing the changes in the network.