Relevance of supply chain dominance: A global perspective

Abstract

Background: The increasing pressure on businesses to remain competitive has made dominant practices more prevalent, particularly in the automotive and retail industries. Financial, exclusionary and exploitative practices seem to be the main occurrences in the global supply chain when analysing dominant behaviours.Objectives: The study explores the global existence of dominant supply chain behaviour and the type of dominant supply chain practices to which smaller supply chain affiliates are subjected.Method: Because of the sensitive nature of the topic, it was not possible to collect primary data. Therefore, secondary qualitative data sourced from surveys, journal articles, news reports, websites, governmental publications and academic reports were analysed and quantitised.Results: A total of 60 cases of dominance were reported in regions across the globe, with Europe and the United States experiencing the most. Although companies in African and Asian markets experienced dominance, the reporting of these incidents seems to be limited.Conclusion: It emerged that dominance is more prevalent in certain industries such as the automotive and retail sectors, mainly through resented practices. Furthermore, small firms that experience bullying have either had to close down or conform to the requirements of the bullying firm to maintain its operations.

Exploring supply chain business bullying of small and medium-sized business suppliers by dominant buyers in the apparel retail sector in Gauteng

“…The findings of this study are aligned with previous research indicating the presence of dominant behaviour by buyers in supply chains (Bala & Kumar 2011;Barber 2011;Defee et al 2009;Durocher-Yvon et al 2019;Habib et al 2015;Kampstra et al 2006;Wang et al 2008). Consistent with Talay et al (2020), the results indicate that large buyers do dominate small suppliers.…”

“…Kampstra et al (2006) further outline that powerful retailers such as Walmart often dictate how collaboration is practiced in a supply chain. Financial actions such as pay to stay, longterm payments, late payment, prompt payment discounts and respective discounting are often used to exert dominance (Durocher-Yvon et al 2019;The Federation of Small Businesses 2018). Barber (2011) identifies five types of supply chain dominance: manufacturer-centric dominance, retailcentric dominance, supplier-centric dominance, distributorcentric dominance and reverse dominance, of which retailcentric dominance is discussed in more detail.…”

“…Dominant behaviour by retail buyers is widespread (Durocher-Yvon et al 2019;Schleper et al 2017). As one of the largest retailers in the world, Amazon has repeatedly dominated supplier efforts by discouraging customers from buying from a certain supplier (Kirkwood 2014) and by infringing on patents, demonstrating unfairness in competition, interfering with contracts and false advertising (Greenfield 2011).…”

“…Evidence has emerged of unfair business practices in the South African retail sector, but the type and extent of such practices, or their implications for SMEs, have not been researched (Durocher-Yvon et al 2019;Von Broembsen 2017). A gap therefore exists in the body of knowledge pertaining to such unfair business practices, in particular in the apparel retail supply chain in South Africa.…”

“…In a definition similar to Barber (2011), Durocher-Yvon et al (2019 suggested that the influence of one participant on another can be either positive or negative.…”