IDEAS home Printed from https://ideas.repec.org/a/mul/j1t56u/doi10.2382-27349y2008i2p225-236.html
   My bibliography  Save this article

Structural implications of vertical relationships between manufacturing and retailing

Author

Listed:
  • Pellegrini Luca

Abstract

The paper reviews the implications of vertical relationships in the fast moving consumer goods markets. Concentration in retailing has changed the balance of power between large brand manufacturers and retailers, making effective the countervailing power that Galbright pointed out in his 1952 book. Through the allocation of space in their stores and selective delisting of products from their assortments, large retailers can obtain lower prices from their suppliers which are then passed on to consumers. Rents obtained by brand manufacturers are reduced and, to improve their margins, they are also lead to dealing more aggressively with their own suppliers. In this way competition in retailing spills over vertically and improves the efficiency of the entire value chain. Moreover, retailers also challenge the market power of their suppliers offering to consumers their own brands. This plays as an indirect stimulus to innovation as manufacturers have to propose new products to make more difficult to retailers to copy existing ones and obtain part of their market. Therefore, it is emphasized how a competitive retail system has widespread implications on the overall efficiency of the economy.

Suggested Citation

  • Pellegrini Luca, 2008. "Structural implications of vertical relationships between manufacturing and retailing," Economia dei Servizi, Società editrice il Mulino, issue 2, pages 225-236.
  • Handle: RePEc:mul:j1t56u:doi:10.2382/27349:y:2008:i:2:p:225-236
    as

    Download full text from publisher

    File URL: https://www.rivisteweb.it/download/article/10.2382/27349
    Download Restriction: Access to full text is restricted to subscribers

    File URL: https://www.rivisteweb.it/doi/10.2382/27349
    Download Restriction: no

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Keywords

    vertical relationships; retailing;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:mul:j1t56u:doi:10.2382/27349:y:2008:i:2:p:225-236. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (). General contact details of provider: https://www.rivisteweb.it/ .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.