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Presented By:

Group 4

Abha Mahalka( U110001)

Amrita Purkayastha (U110008)

Prakhar Aggarwal(U110035)

Rashmi Agarwal(U110041)

Rishi Agarwal(U110042)

Shashank Vijay(U110055)

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Definition:The capacity that A has to

influence the behavior of B so that B acts inaccordance with As wishes.

Advantageous only in short run.

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Resistance

Less powerful partners seek ways to resist develop private labels,mergers

Self Defeat

Fall of customers/suppliers due to overexploitation based on coercive power wouldlead to self defeat

Position ofPower

Can hurt a company when position of powerchanges

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Trust

Honesty

Leap of FaithDependability

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MoreCommitment

Higher

performance

Goo ill,preserves therelationships

Better pricean eliveryterms

Betterun erstan ingbet eenmanufactureran retailer

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Whenwould trust

work?

Rarely all-encompassing

Exclusivityof relation

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JUSTICE

Distributive Procedural

Share of pie

Division of benefits and

burdens between

partners

Prerogative of the bigger

partner.

Example: Mark &

Spencer kitchen product

supplier

Fairness of parties procedures

and policies for dealing with

its vulnerable partners.

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BilateralCommunication

Engaging in two way communication with weaker partners

Example: Mark & Spencer gives keycards to regular suppliers

Impartiality

Dealing equitably with weaker channel partners

iving everyone fair share of business

Minimizing changes in the yearly pie, so suppliers can adjust capacities

Example: Mark & Spencer allows suppliers to appeal decision to higherlevel

Refutability

Vulnerable partners can appeal powerful partys channel policies anddecisions

Example: Mark & Spencer allows suppliers to appeal decision to higherlevel

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Explanation

Powerful party provides coherent rationale for its channel policies anddecisions

Example: Mark & Spencer does it in annual meeting attended by storemanagers and major suppliers

Familiarity

Understanding and awareness about the conditions weaker partnersoperate in.

Example: Mark & Spencer visit plants and conducts inter-employeemeetings before taking in a manufacturer.

Courtesy

Mutual respect is crucial as ultimately its a relationship between teams of

people.Example: Sherwin-Williams (paint manufacturer) lets Sears managers help

in selecting people who handle their account

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Distributive

Simply higher margins mayseem better.

Its expensive and risky.

Attractive returns may bethe magnet.

Procedural

Procedural justice is longterm.

Requires greater effort,energy, investment,

patience and even achange in organizationalculture.

Procedural fairness is theglue to hold relationships.

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Attribute

Modus Operandi

uiding principle Negotiation Strategy

Communication

Influence

Contracts

Conflict reduction

Conflict Resolution

Modus Operandi

uiding principle Negotiation Strategy

Communication

Influence

Contracts

Conflict reduction

Conflict Resolution

Power ame

Create fear

Pursue self-interest Avoid dependence

Primarily unilateral

Through coercion

Closed, formal,detailed

Through detailedcontract

Legal system

Create fear

Pursue self-interest Avoid dependence

Primarily unilateral

Through coercion

Closed, formal,detailed

Through detailedcontract

Legal system

Trust ame

Create trust

Pursue what is fair Createinterdependence

Bilateral

Through expertise

Open, informal,long-term

Select partners withsimilar values andmutualunderstanding

Mediation andarbitration

Create trust

Pursue what is fair Createinterdependence

Bilateral

Through expertise

Open, informal,long-term

Select partners withsimilar values andmutualunderstanding

Mediation andarbitration

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Avoid long detailedcontracts

Have an informalflexible relationship

Legal force replacedby mutual obligation

Example1: Wholesalers in Japan

Example 2: Mark & Spencer regards supplier relationships (some of

them more than 100 yrs old) as morally binding

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Encourage employeesto learn partners

business

Looks for opportunitiesbenefiting both

May have to reorganizeto achieve this

Example1: Kraft did away with sales force and assigned the

people to business teams dedicated to every retail customer.

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Encourage personal

relationships unlike inpower game where it is

discouraged

Companies shouldminimize employee

turnover asrelationships take long

time to build

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Change type of peoplerecruited to work with

channel partners.

Shift from volumeprice focus torelationship focus

Change in incentiveand performance

measurement required

Example: P&G changed from rewarding sales managers to transfer

inventory to rewarding for maximization of both P&G and retailer

profit

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Joint educationprograms to

breakdown barriers

build relationshipbased on trust and

mutual respect

Example: Philip Morris runs 2 day seminars training retailers to

become better at their jobs. Gives out certificates which retailers

proudly display in their stores

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Trust results in

Reduced transaction cost

Flexibility towards market changes

Creative solutions for mutual as well as customerbenefit.

Vertically integrated companies are too inflexible

and traditional manufacturer-retailer relationships

are too adversarial for this.

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