Large Buyers Research Articles

Using List Prices to Collude or to Compete?

Abstract Collusion is deemed unlikely in wholesale markets where upstream suppliers and intermediate buyers privately negotiate discounts off list prices and sales quotas are unfeasible. However, many wholesale markets include both small and large buyers who compete in the retail market. We study the role of publicly announced list prices in this wholesale-retail setting, whether suppliers collude or compete. When suppliers collude, public announcements of list prices extend the possibility of collusion from small to large buyers (the multi-buyer contact effect). When suppliers compete, these announcements provide them with commitment to negotiate better terms with large buyers (the commitment effect).

A Collaboration Design Method for Facilitating SME Inclusion in Global Supply Chains

Small and Medium-sized Enterprises (SMEs) face steep challenges in fulfilling sustainability and resilience requirements when joining global supply chains. These challenges often relate to lack of capabilities, accreditations and/or capacity demanded by OEMs and Tier 1 players in the process of forming a supply chain composition. To address some of the challenges and lower entry barriers for SMEs, this paper formalises a Collaboration Design Method (CDM) that can assemble and coordinate supplier teams responding to a tender from a large buyer. CDM comprises five recursive design decisions: (1) Decomposing tendering goals; (2) Assigning sub-goals to suppliers in a team; (3) Operationalizing sub-goals through supplier processes within a team; (4) Decomposing processes to identify steps that can be outsourced; and (5) Defining coordination mechanisms. Feedback from industrial SMEs indicates that CDM provides a viable approach to tame supply chain formation complexity and ease barriers that prevent SMEs from collaborating in global supply chains.

Quality Characteristics of Robusta Coffee (Coffea Canephora) Farmer Group in The Village of Tebat Island, Rejang Lebong Regency with Variation of Roasting Long Time

Tebat Pulau Village is, a formerly protected forest area that has now become a community social forest processed and planted with robusta coffee. Robusta coffee from the Tebat Pulau Village Farmers Group is of good quality because it is in great demand and attracts the attention of large buyers. However, it is not yet known what the quality profile, the criteria for roasted coffee and the preferred quality of brewed coffee are. Therefore, this research was conducted to determine the quality profile of rice coffee, the physical and chemical characteristics of ground coffee and the brewing quality of robusta coffee during roasting time. The experimental design used was Completely Randomized Design with one factor. The factor tested was roasting time (P), which consisted of 4 treatment levels, namely P1:10 minutes, P 2:11 minutes, P3:12 minutes, P4:13 minutes with roaster temperature 200°C and bean temperature 107°C . The research was carried out with 3 repetitions to produce 12 experimental units. The results showed that the coffee from the Tebat Pulau Village Farmer Group had quite large coffee beans with a water content value of 9.00%, had quite a lot of lanang (peaberry bean) coffee beans, and had a total defect value of 13.83. Ground coffee samples with a long roasting time significantly affected water content, color, ash content, coffee essence, and caffeine content. The best-brewed coffee quality was obtained at 12 minutes of roasting time with a final score of 8.50, which is included in the "fine" category.

Government procurement and resource misallocation: Evidence from China

Government often acts as the largest buyer in an economy through government procurement. The allocation of procurement orders however is often distorted. We build a model with heterogeneous firms endogenously seeking government favors in procurement to show that misallocation of procurement orders further leads to misallocation of production factors. Using the enactment of the <Chinese Government Procurement Law> in 2003 as a natural experiment, we find that tighter regulation of procurement in China lowers the extent of resource misallocation in industries that rely more on government procurement. We further provide firm-level evidence in support of our model.

A Practical Approach to Providing Environmental Enrichment to Pigs and Broiler Chickens Housed in Intensive Systems.

In Europe, regulations contain guidance to maintain high standards of animal welfare. In many parts of the world, large buyers for supermarkets or restaurants are the main enforcers of basic animal welfare standards. They can have considerable influence on improving standards on large commercial farms. Research clearly shows that straw is one of the most effective environmental enrichment for pigs. On some large farms, there are concerns that straw will either clog waste management systems or bring in disease. This paper contains a review of both scientific research and practical experience with enrichment devices that are easy to implement. Pigs prefer enrichment objects that they can chew up and deform. Broiler chickens prefer to climb up on objects, hide under them or peck them. It is always essential to uphold basic welfare standards such as animal cleanliness and low levels of lameness (difficulty walking). It is also important to reduce lesions, and maintain body conditions of breeding animals. An environment enrichment device is never a substitute for poorly managed facilities. It should enhance animal welfare on well-managed farms.

Fear psychosis : Marketing strategy for next gen buyers

Marketing has reached the holistic concept era where a business is acting as single entity not to ignore any potential segment. Hence, companies look for profitable segments and strategies holistically for a sustainable business performance . The Millennial are considered as the largest buyers &amp; influencers of new and proven commodities worldwide. This is the generation that have taken over the workforces and are the strongest economic force segment to recognize. This generation is vulnerable on choices , rational/ less emotional on buying approach, evaluative on advantages, benefits and disadvantages , with great buying power and sources of information. So making them to remain associated with the brand, making them to do repeat buys, control their rationality and evaluative approach is not the easy task. Marketers need to do something strategically to “hold” them to buy their products and remain engaged . Companies believe that the only thing this rational, non emotional, evaluative, money minded customer could be handled is to make him “fearful about his health, safety &amp; security. Create threats to these sensitive aspects and then offer solution for those , he will believe that you care for him the most. In recent years this strategy has come up as Fear Psychosis which is an extension of emotional Psychosis in marketing context . It is the only thing seems to be working on this generation. Fear-based marketing influences the audiences’ psychology and urges them to take action to minimize that fear. This strategy has helped businesses to keep the customers engaged with the brand and believe that company cares for him better than others.

Addressing a human rights paradox in the green transition: Guidance for invested mining operations to benefit local communities

Current understandings of ‘cleaner production’ include views that companies should act on problems involving human rights, resources, and community involvement. They should contribute to human development and social enhancement through minimization of risks to people and communities, and support their development. While theory-based knowledge on how investors may do this remains limited, some transnational business governance instruments provide guidance. This article discusses how the human rights paradox of the green transition to fight climate change can be turned into opportunities for investors to contribute to local communities hosting transition minerals mining. The analysis is based on guidance from the Organisation for Economic Co-operation and Development (OECD), a major market for transition minerals or energy-related products containing such minerals, and China, the world's largest buyer and manufacturer of transition minerals, The article identifies actions for investors to cascade human rights due diligence and relevant capacity through the investment chain in ways that both limit harmful impacts and contribute beneficially to communities' human rights.

How startups become attractive to suppliers and achieve preferred customer status: Factors influencing the positioning of young firms

Achieving preferred customer status with suppliers helps startups to mobilize suppliers' resources. However, in purchasing, startups also compete against large buyers for suppliers' resources. Furthermore, their newness is a liability that suppliers find unattractive. Consequently, attracting and maintaining relationships is a challenge for startups' procurement. This paper investigates the strategies that startups use to attract large suppliers, improve mutual business relationships, and receive preferential supplier treatment. Based on the preferred customership literature and world café data from 15 startup buyers and suppliers, we identified seven factors that explain how startups attract suppliers, maintain relationships with them, and achieve preferred customer status. These factors are strategic compatibility, innovation potential, startup network, credible growth opportunity, profitability, memorable experiences, and purchaser sellership.

Load-Following Forward Contracts

Suppliers and large buyers of electricity often sign load-following forward contracts (LFFCs). A LFFC obligates an electricity supplier to deliver at a pre-specified unit price a fraction of the buyer’s ultimate demand for electricity. We show that relative to more standard (“swap”) forward contracts, LFFCs can reduce the variation in the wholesale price of electricity. However, LFFCs also can increase the expected wholesale price and thereby reduce expected consumer surplus and total surplus.

Развитие оптового рынка электрической энергии и мощности в контексте Федерального закона «Об электро- энергетике»

The wholesale electricity and capacity market is a sphere of circulation of special goods — electricity and capacity within the framework of the Unified Energy System of Russia within the boundaries of the single economic space of the Russian Federation with the participation of large producers and large buyers of electricity and capacity, as well as other persons who have received the status of a wholesaler market. Legislative regulation of the structure, mechanisms of trade in the wholesale market by the norms of the Federal Law of March 26, 2003 No. 35-FZ “On the Electric Power Industry” has undergone changes over a twenty-year history. The article provides an overview of the modern structure of the wholesale electricity and power market, examines historical changes, and describes the prospects for further development of the wholesale market model.

When the chickens come home to roost: The short‐ versus long‐term performance implications of government contracting and supplier network structure

AbstractThe old adage “it is not what you know, but who you know” suggests that in connection(s) lies the key(s) to success. But what does success mean, and for how long will it last? What does the choice of partner, and network connections say about the performance implications of contracting, particularly in the case of a public–private partnership? With countries such as the United States accounting for the world's largest buyer (of any and everything), several suppliers eagerly await their opportunity to contract with large government entities, but is it always a wise decision? Such questions remain largely unexplored and require answers. This research provides answers to these questions by integrating congruence, and network theory to investigate how government contracting impacts private suppliers' financial performance and how suppliers' supply chain network connections moderate this relationship. Results using panel data over several years suggest that while contracting with government bolsters' short‐term financial performance (ROA), it negatively affects long‐term supplier performance (Tobin's Q). In addition, the prominence of a firm's connections (i.e., who they know) and the composition of these connections enhances the performance gains, highlighting the critical role of a firm's network structure on their performance within the contracting relationship. We therefore find that the power of supply chain network connections enhances the short‐term positive effects and mitigates the long‐term adverse effects when contracting with government buyers, as the relationship is not always universally positive.

Deceptive evidence: The experience of product market definition for the purpose of competition law enforcement

Could identical goods sold by the same company on the same territory and at the same time be attributed to different product markets? In our paper we take a closer look at the case of the wrought-steel wheel industry, which became the subject of an antitrust investigation initiated by the FAS Russia in 2020. During a shortage, one of the largest wrought-steel wheel producers sold small batches of wheels to minor buyers at relatively high prices compared to the industry average. FAS Russia assumed this price difference to be evidence for abuse of market power. In contrast to FAS Russia’s conclusions, we suggest that wrought-steel wheels sold to major and minor buyers constitute at least two separate markets. To test this hypothesis, we define a relevant product market employing a price correlation analysis. To conduct robustness check we also provide a stationarity test on the log price ratio and a cointegration test which fall within the results of correlation analysis. As consumers actually did engage in side transactions, the revealed price difference is not related to price discrimination. We explain this price difference using the new institutional economics, assuming that goods sold to a large buyer do possess special transaction characteristics which do not meet the characteristics of the batches consumed by minor buyers. Another explanation is differences in bargaining power between large and minor buyers. Our result shows that there can be identified at least two wrought-steel wheel product markets: one with Russian Railways as the main buyer and the second one with smaller undertakings.

The Role of Social Organizations in the Rescue of Abducted Women in China

Gradual enhancement of the law system and modernization do not prevent human trafficking crime away from Chinese people’s lives. The considerably large buyer's market due to the imbalance of economic and cultural development, the difficulty of cross-regional criminal investigation, and the deficiencies of legislation related to human trafficking incentivize criminals to take risks for economic benefits. When discussing the ways to “activate” each link on the chain of the social system that eventually results in crimes, the role of social organizations, especially the Women’s Federation is often neglected. This paper will first focus on the empowerment of social organizations in the process of settling down victims and offering mental therapy and re-employment training. This part will also examine the challenges of empowerment and the potential solutions. The Women's Federation is at the front line of contact with women victims of abduction and has abundant information at its disposal; therefore, legal improvement and aid assistance are also what social organizations can provide. Then the paper will emphasize the approaches for social organizations to utilize their resources and connections to assist local governments, law institutions, and police officers in facilitating the work of preventing human trafficking. After investigating the specific functions social organizations can execute after rescuing the victims, the paper will highlight how they play a role in preventing crimes from taking place by educating the most vulnerable group of people. A combination of precaution and remediation measures is necessary and complementary in keeping people safe from human trafficking.

Феномен переговорной силы на конкурентных товарных рынках

The emergence of network retailers and corporate associative structures in some industries, which became the largest buyers or initiators of market processes, began to form the buyer’s market power or bargaining power of the buyer that became the object of a broader study and confirmed its relevance. The realization of bargaining power on the part of the consumer does not always manifest itself in the system of economic interactions as an action that violates competition, but often is identified as a mechanism of business strategies or a form of implementation of marketing competitive practices. There are types of markets and market situations in which bargaining power is essentially the central link of the transaction, regulating prices, volumes, contract terms and distribution of benefits. The purpose of the study is to consider the phenomenon of bargaining power, since the consequences of its manifestations form long-term losses for both the seller and the market as a whole. To achieve this goal, it is necessary to solve several tasks: to conduct a theoretical analysis of the concept of “bargaining power”, to determine the difference between bargaining power and market power and to identify factors affecting the formation and development of bargaining power. This article focuses on the study of the evolution of theoretical thought in the field of disclosure of the phenomenon of bargaining power. Foreign sources give some understanding of the subject of bargaining power, but the question of factors, research schools and evaluation indicators still remains open. Based on the available bibliographic content, the article presents a comprehensive analysis of the category of “bargaining power” in various conditions of interaction of agents, the established scientific directions of its study. The systematized factors influencing the negotiating power and the vectors of their impact reflect the accumulated author’s opinion of different research views. The article reflects the criteria characteristics of the manifestation of bargaining power in the market. Understanding the essence of the phenomenon under study can be useful for expanding the field of market analysis in cases of antimonopoly proceedings, preventing anticompetitive actions, forming an antimonopoly compliance system and preventing antimonopoly risks.

Buyer’s Perception of Supplier-Induced Disruptions by Large versus Small Firms

While size asymmetry (i.e., large buyer and small supplier) has been discussed in a no-disruption operation context (Lee & Johnsen, 2012), it is unclear whether and how a large buyer reacts differently when different-sized suppliers cause different types of disruptions. Extant research suggests in a supplier-induced disruption that a supplier’s recovery actions are more effective when the supplier is more dependent on the buyer, indicating a need for deeper understanding of what buyers prefer in order to resolve disruptions caused by facing different sized suppliers. Accordingly, we examine the effect of supplier size and supplier-induced disruption type on commitment as well as buyers’ preferred use of mediated power. Grounded in commitment-trust theory, our test examines the key mediating role of commitment in inter-organizational relationships in supplier-induced disruptions. Conducting scenario-based experiments with sample size of 266, we find that a large buyer is more committed to a large supplier than to a small supplier in a supplier-induced disruption. Interestingly, a large buyer prefers to use mediated power strategies with a large supplier than with a small one. Commitment is found to mediate the effect of supplier size and mediated power, particularly with reward and monitor strategies. Although the interaction of supplier size and disruption type does not impact commitment or mediated power, integrity disruption damages buyer commitment more than competence disruption does. Moreover, only in an integrity disruption does supplier size significantly impact the buyer's preference for using a reward strategy.The author would like to acknowledge and thank Dr. Daniel Bumblauskas from the University of Northern Iowa, Department of Management for his contributions to this work. Dr. Bumblauskas provided advisory support to the author for this paper.

Procurement Institutions and Essential Drug Supply in Low and Middle-Income Countries

International procurement institutions have played an important role in drug supply. This paper studies price, delivery, and shipment time of essential drugs supplied in 106 developing countries from 2007-2017 across four procurement institution types. We find that pooled procurement institutions lower prices: pooling internationally is most effective for small buyers and more concentrated markets, and pooling within-country is most effective for large buyers and less concentrated markets. Pooling can reduce delays, but at the cost of longer anticipated shipment times. Finally, pooled procurement is more effective for older generation drugs, compared to IP licensing institutions that focus on newer, patented drugs. We corroborate the findings using multiple identification strategies, including an instrumental variable strategy as well as the Altonji-Elder-Taber-Oster method for selection on unobservables. Our results suggest that the optimal mixture of procurement institutions depends on the trade-off between costs and urgency of need, with pooled international procurement institutions particularly valuable when countries can plan well ahead of time.

Changes of China’s soybean import market power and influencing factors

ABSTRACT Whether Chinese soybean importers can keenly grasp the changes of different source countries’ market power, will directly affects the safety and cost of soybean import. Based on the analysis of changes in China’s soybean import trade structure, this paper utilizes monthly data from January 2009 to December 2021, combines with the residual demand elasticity model, to compare and analyse the market power of the three major source countries. The results show that although the United States is no longer China’s largest soybean import country, its market power in China’s soybean import market has not been affected, while Argentina’s market power is gradually increasing. Although Brazil has grown into the first source of China’s soybean imports, it has only weak market influence. In addition, China, as the world’s largest buyer, doesn’t have market power. China’s soybean import price is mainly affected by futures prices, domestic soybean prices, international crude oil prices, Sino-US trade frictions and COVID-19 epidemic.

Driving through dense fog: a study of the effects and control of sustainable public procurement of electric cars

Governments are large buyers of vehicles, thus contributing to pollution. To promote sustainability, policies have been shaped to replace government-owned fossil fuel cars with electric cars. Public procurement is seen as a strategic tool for the government to transition. This study identifies a research gap due to a lack of studies on how stakeholders at different levels identify and calculate the sustainability effects of public procurement of cars. Our approach uses a multilevel perspective to explore how various stakeholders perceive and assess the effects of sustainable public procurement. The data were obtained through a qualitative research design with documents and semi-structured interviews with stakeholders in Norway ranging from government agencies, public procurement officers, car suppliers, and end-users. (End-users in this setting are the ones who ultimately use the vehicles). The study’s findings are two-fold. First, it contributes to understanding that perceived effects of sustainable public procurement vary from the stakeholders' perspectives and that public procurement initiatives perceive to have cultural effects in addition to innovation, environmental, economic, and social impacts. Second, it contributes to understanding the importance of feedback mechanisms in public procurement to align the assessment of the effects. A better understanding of how effects are identified, and improved feedback mechanisms could help government representatives control the procurement system and accomplish the intended effects.

Competing for Technology Talent: Listed Companies Versus Funded Startups in India

Information technology (IT) services industry has become a mainstay for technology talent in the last few decades. Recently, the emergence of startups in the high-tech sector has also contributed to the demand for talent in the sector. This has led to a situation, where both incumbent listed companies and venture capital-backed technology startups, compete for technology talent in the ecosystem. We probe this from the convergence in average per employee labor costs between listed IT services companies and funded entrepreneurial startups (less than 10 years old) in the sector. We work on a stylized sample of 36 companies and find that listed IT services companies have continued to remain large buyers of talent and are consistently paying higher wages than startups. Whereas the rate of growth in average salaries among technology startups is higher than listed counterparts during the study period. Such a rate of growth of average wages suggests that there is potential for startups to bridge the gap with listed companies’ salaries. The narrowing of the salary differential gap may affect the competition for talent in the ecosystem, impacting both startups and larger companies. Such competition can challenge listed companies’ profit and growth over the long term. But such a change hinges on startups ability to raise further funding to support expenses.

Between Biodiversity Conservation and the Supply for Broadleaved Wood: A Case Study of State Forests National Forest Holding (Poland)

Climate change is an important issue that increasingly affects our lives. One of the proposals for mitigating climate change is fighting biodiversity loss, which can support climate mitigation and adaptation actions. In Poland, the possibility of excluding large tracts of forest areas from use is being considered. The discussed the exclusion of forest land from use will affect the timber supply and market, especially for broadleaved wood. The main purpose of this analysis is to present a timber supply forecast, with a particular focus on the possibility of obtaining broadleaved hardwood timber in Poland from forests managed by State Forests National Forest Holding under three scenarios that assume different criteria for selecting forest areas for protection. The work was divided into two main phases: (1) the analysis of historical sales volume of wood products and average sale prices of hardwood during the period 2011–2020; (2) the preparation of a forecast of the potential possibility of maintaining broadleaved hardwood production in the three decades between 2020 and 2049. In the forecast, it was assumed that about 2.7 million hectares of planted and production forests are excluded from use in order to implement the provisions of the 2030 Biodiversity Strategy. In Scenario “I”, the supply of merchantable broadleaved roundwood volume will be reduced to 14%–18% that of Scenario “0”. In Scenario “II”, 55% of the “0” scenario is harvested, and in Scenario “III”, 33%–37% of the “0” scenario merchantable broadleaved roundwood is harvested. The introduction of restrictions on timber harvesting as a result of Poland’s compliance with European Union requirements in the area of environmental protection will lead to a significant reduction in the supply of timber on the market. This may lead to a further increase in timber prices and an increase in the importance of large timber buyers at the expense of local buyers. The recommendations contained in the policy objectives that the EU sets for the states should be supported by a thorough analysis when selecting areas for strict protection.