In the case of the dyadic relationship, two stakeholders need to be considered. It is the focal firm and the buyer (Buttle, 2001). The supplier costs and value of the buyer places and the gaps that are found to have formed between them are known as the surplus value. The parties are found to collaborate and work with each other to add value. In this case, there will be competition that will be divided based on the total value of the products that are procured (Thompson and Strickland, 2001). The dynamics of the power relationship in the value chain depends on the notion of supply and demand for the product. Based on this, the buyer and seller relationship needs to be understood (Schepker et al., 2014). The buyer-supplier
Scarcityit is the demand of the product in the market. Typically, if a product is in excess, the dominance would be reduced.
InformationThis factor is based on the supplier and it focuses on what the buyer wants to buy the price of the products and the internal budgeting processes. Based on these variables, there can be general discussions about the different kinds of relationships that can be forged in this situation (Hollensen, 2015).
There can be four generic divides based on these three important variables. The four generic kinds of situations can be derived from this paradigm.
In this case, the buyer would have more dominance over the sales of the product. For example, if the buyer has many choices and there is excess supply in the market, the buyer will have more control over the product. In the case of the automobile industry, a number of companies similar service offering (Teece et al., 1997)). In this paradigm, the end consumer will have more choice in the products that they want to procure.
In this state, there will be interdependence between the two parties. For example, in the cases of vertical integration, the suppliers will depend on the buyer to make the purchase and the buyer will have to procure the quality products (Piercy, 2010). There is an interdependence that is observed in these cases.
In these condition, the seller can essentially sell their product to a number of people and the buyer can buy the product from many sources. This is observed typically in the B2C markets.