Role of brand equity and competitive strategies in the relation between horizontal alliances and its benefits

Abstract

Purpose Drawing on the resource-based view, this study aims to investigate the conditions under which small- and medium-sized retailers can improve competitive benefits through the lens of brand equity and strategies for competitive advantage in retail buying groups. Design/methodology/approach This study collected 241 samples from small- and medium-sized supermarket retailers who joined retail buying groups in Japan. Findings This study offers two key findings. First, the results indicate that a buying group’s brand equity partially mediates the relationship between member retailers’ strategic integration and their buying group benefits. Second, member retailers with a stronger differentiation orientation strengthen the positive impact of strategic integration on the buying group’s brand equity and buying group benefits. The moderating effects of low-cost orientation were not found to be significant. Practical implications To highlight the sustainable growth of small- and medium-sized retailers in retail buying groups, which are often ignored in the extant literature, this study offers practical guidance on the importance of a buying group’s brand equity. In addition, based on the findings, this paper postulates that member retailers pursuing differentiation orientation, rather than low-cost orientation, are more beneficial to retail buying groups in terms of relational outcomes and performance consequences. Originality/value By conceptualizing brand equity in retail buying groups, this study suggests a novel approach for retail management that investigates how a buying group’s brand equity is linked to strategic integration, strategies for competitive advantage and buying group benefits from the viewpoint of member retailers.