Paradox of the Channel Power on EDI systems

Abstract

In this paper, we discuss how EDl(Electronic Data Interchange) system changes the channel-power. EDI system is defined as the power-base in the distribution channel because it can change the bargaining power in the vertical relationships and it can be a competitive weapon to carry the asymmetry of information systems.In addition, EDI system forms the resource-dependence relationship between two firms. The characteristic of powerbase by EDI system is "transferable", since EDI resource is a software, and which is easy to copy and transferable, then, it leads to a paradox that if company A has EDI system and A requires company B to develop EDI system, B can have its own power-base which is equal to A by developing EDI system. Or if company A helps B to develop resource-dependent system, B cannot have its own power-base, but at the same time, A fails to have more flexible power-base.