Examining the dynamics of bargaining power in buyer-supplier negotiations: insights from a case study in the German automotive industry

ABSTRACT

Buyer-supplier negotiations play a central role in supply chain networks regulating the conditions for the exchange of goods. This paper investigates the relationships between influencing factors and their impact on bargaining power. In a multiple case study, we triangulate secondary data from 12 German automotive suppliers. Following a structural equation modelling approach, bargaining power and the effects of those influencing variables are analysed. Four relationships can be found. (1) The availability of internal resources and the existence of strong buyer-supplier relationships have a positive effect on bargaining power. (2) A positive influence of buyer-supplier relationships on gaining access to internal resources can be identified. (3) External market conditions have a small negative effect on bargaining power. (4) No significant effect can be found looking at the impact of external market conditions on internal resources or buyer-supplier relationships. The findings support theory by showing that internal resources and strong buyer-supplier relationships positively influence bargaining power. Based on these results, managers are advised to prioritise strategic resource allocation, implement win-win strategies, and employ benchmarking techniques to enhance competitiveness and strengthen bargaining positions.

KEYWORDS:

• Bargaining power
• negotiation
• buyer-supplier relationships
• resources
• market conditions

Disclosure statement

No potential conflict of interest was reported by the author(s).

Data availability statement

Data is available in the manuscript and online appendix.

Additional information

Notes on contributors

Frank Bodendorf

Frank Bodendorf graduated in 2017 from the School of Engineering at the University of Erlangen-Nuremberg, Germany, with a master’s degree in industrial engineering. Subsequently he has been research assistant at the Institute for Factory Automation and Production Systems. Actually, he holds a leading position at the BMW Group, focusing on data governance and digital transformation. He is responsible for numerous digitalisation projects in interfacing areas such as IT, quality, purchasing, and supply chain management.

Jörg Franke

Jörg Franke graduated in 1989 with a diploma degree in production engineering. After holding several top management positions in industry he is director of the Institute for Factory Automation and Production Systems at the University of Erlangen-Nuremberg since 2009.