Buyer Power Derived From Upstream Competiton

On the background of economic development, the retail trade in china has made considerable progress already,but the relationship between the supplier and retailer is much more tense than before.Dissension between them appears like that retailers' overbearing articles make supplier cann't bear then revolt in some extreme form. The purpose of this article is to explore the resource of buyer power that the reason of this phenomena.There are thounds literatures on this issue. The characteristic of this article is that we shown upstream competition yield buyer by genenrating supplier-level volume uncertainty, using the two-person bargaining model as tool.Suppose when a retailer bargaining with a supplier,they divide the surplus what exceed their out option equally.there are many suppliers, retailer bargain with different suppliers in random order.Every bargaining course could be represent by aequation.Solving this simultaneous equations,we get the result------negotiated pricethat have something to do with buyers' size,suppliers' quantity and price when have no agreement with one supplier.Other parts of this model pay close attention to two questions:first, the effect of a change in upstream;second, the relationship between buyer power and competition among suppliers.At last,we make comments on slotting allowances.From the result of the model, we know that slotting allowances is reasonable,the way that eliminate the harmful effect of big retailers' buyer power is make suppliers have countervailing power.This conclusion offers some helpful enlightenment to industrial transformation in our country.