Information technology can reduce coordination costs, leading to increased coordination and cooperation among buyers and suppliers in an industry. However, increased cooperation may be limited by other factors, particularly power dynamics and the structure of the bargaining game. This paper investigates the role of power in influencing the effects of IT on interactions between manufacturers and retailers in the consumer packaged goods industry. IT can change the balance of power by changing the value of key resources, including information, This will affect the division of benefits from improved coordination through IT, thus shaping the level and form of coordination.