The growth of trading networks as a factor of strengthening the power asymmetry in the system of goods circulation in the consumer market
Abstract
The growth of trading networks as a factor of strengthening the power asymmetry in the system of goods circulation in the consumer market
Incoming article date: 01.04.2013In the article the author examines factors and reasons causing the problem of strengthening the power asymmetry as a result of market expansion of trading networks, which is identified by the author as a system empirical trend in the market determining structurization of its organizational field.
Evaluating the high potential of development of format trade in the Russian market, the author concludes that the rapid expansion of trading networks creates enormous pressure on the manufacturing business: increasing potential difference is transforming into asymmetry of market power of network retail trade and production companies that stimulates the process of their extremely non-equilibrium strategic positioning in the system of goods supply in the domestic market of the country.
The author comes to the conclusion that the potential of building mutually beneficial strategic partnership relations between manufacturers and trading networks is today relatively restricted by reason of dominant position of networks in the system of goods circulation in the consumer market. Formation of economically effective and strategically balanced partnership alliance of networks and suppliers occurs predominantly only with medium-sized and large manufacturing FMCG companies which have sufficient level of technological capacity and resources which allow them to produce quality high-tech production adequate positioning of which automatically creates in the market powerful production brand.Keywords: Supply chain, asymmetry, market power, trading network, producer, expansion