Market structure and business performance: An evaluation of buyer/seller power in the pims database
Strategic Management Journal
1988
Abstract This paper explores the patterns of buyer and seller structure among business units in the PIMS database and how buyer/seller structure is related to profit outcomes, both long‐term through the product life cycle and short‐term between periods of boom and recession. Businesses with a favourable structure (few sellers, many buyers buying items of low importance) typically maintain margins through the product life cycle, but if there are many sellers facing few and determined buyers, margins and profitability are likely to deteriorate in recession and to continue to decline through the life cycle.
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- 10.1002/smj.4250090306
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