Abstract

The Internet has brought a new way of collaboration among consumers to the door steps of retailers. Existing studies have assumed that retailers play an active role and focused on discussing how retailers can make good use of Web 2.0 to develop new business models, however little has been done to address what retailers should do if being forced to cope with changes. This paper, based on a stakeholder influence strategy perspective, studies how the structural relationship factors have influenced retailers’ strategic decisions on whether or not to accommodate a consumer led group buying behaviour in China, Tuangou. Tuangou refers to the phenomenon that a group of web users are organized using the Internet and physically approach the retailers together to negotiate for a discount for a particular product or service by using their collective bargaining power. This paper provides a useful initial roadmap to understanding how the pressures from different stakeholders might influence a retailer’s decision-making at the Web2.0 age. It also develops propositions to conceptualise the relationship between structural factors and decision outcomes. This paper offers an explanation of why retailers make different decisions to cope with Tuangou activities and concludes with a plan for future studies.

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