Vertical information sharing has posed a sensitive strategic challenge among retail firms who, by their location at the end of the supply chain, possess the most valuable segment of the information real estate and one that is valuable to all members of the supply chain. The challenge is this: on one hand information sharing increases the efficiency of the retailers by better coordinating supplies and orders, and on the other hand, it may compromise the bargaining power of the retailers, opening them to opportunistic behavior on the part of suppliers. Nowhere is this dilemma more apparent than in the food sector. Basing its analysis onthe Supermarket Panel Data conducted by the University of Minnesota’s Food Industry Center, this paper examines this issue. It was found that there appears to be a “digital divide in information sharing” between the two types of market structures. This divide, however, is distinct from the issue of cost of IT adoption and the question of its affordability. Rather, it is based on the concept of incomplete markets, as it relates to the incompleteness of the information flow.
You must be logged in to post a comment.