The Sourcing Strategy Decision for Private Brands in Grocery Retailing

Abstract

Since grocery retailers strategically use their private brands, they place importance on the quality of the products. Accordingly, the importance of the sourcing strategy decision for grocery private brands has increased. However, to date, there is a lack of research. For this reason, this study examines a number of factors influencing the sourcing strategy decision for private brands in grocery retailing. The main purpose of this study is to develop a model conceptualizing how transaction cost factors and organizational factors moderate the path from ideal sourcing strategy based on competitive positioning to actual sourcing strategy. The proposed model offers some managerial guidance to grocery retailers by presenting factors that should be considered in evaluating and determining the sourcing strategy for private brands.