December 17, 2017
Judith Miggelbrink *
University of Zurich
This exploratory study seeks to address this gap in the extant literature and to obtain insights regarding the subject of direct sourcing by relying on primary data and the relevant literature to ensure the accuracy and applicability of future primary research. Section 2 introduces the framework that guides our exploratory effort. Our starting point to explore the issue of retailer-initiated direct trading relationships is the retailer’s sourcing strategy. In case that a switch from sourcing through wholesalers to direct sourcing at manufacturers is a strategy priority, the next questions are whether (a) the retailer has the power to shift the distributive functions performed by wholesalers to manufacturers, or (b) whether the retailer has the resources to integrate the distributive functions. In sections 3 and 4, we present a synthesis of the existing data and research that address the research questions derived from the framework introduced in section 2, namely (1) Was establishing direct trading relationships with manufacturers a priority for large Japanese retailers? (2) Did large retailers have the necessary power to shift the distributive functions that were performed by wholesalers to manufacturers? (3) Did large retailers have the necessary power to circumvent the wholesale sector? And (4) Did large retailers have the necessary resources to integrate the distributive functions? Section 5 provides an overview of the main findings of the study. Despite the importance for foreign firms trying to tap the Japanese consumer market, the question whether large retailers in Japan have started to source a greater share of their products directly at manufacturers has been largely ignored by studies on the Japanese distribution system. This exploratory study contributes to fill this gap. Contrary to the widespread belief, the findings of this study suggest that retailer-initiated direct trading relationships with manufacturers in Japan did not significantly increase between 1990 and 2005.
Keywords: Japan, distribution system, large retailers, direct trading relationships, direct sourcing.
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About the Author
Author is the completed her PhD at the Institute of Asian and Oriental Studies, University of Zurich, in 2010. Prior to becoming a senior researcher at the Chair for Socioeconomic Japanese Studies, she worked many years in the private industry. She is especially interested in Japan from an industrial management’s point of view.