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Article
Publication date: 29 April 2024

Nana Wan and Jianchang Fan

This paper forms an e-commerce supply chain that include a manufacturer providing products and an online platform providing service. The reselling platform mode and the agent…

Abstract

Purpose

This paper forms an e-commerce supply chain that include a manufacturer providing products and an online platform providing service. The reselling platform mode and the agent platform mode are considered through an exploration of the manufacturer Stackelberg (MS), vertical Nash (VN), platform Stackelberg (PS) power structures. The purpose of this paper is to explore the pricing and platform service decisions under different platform selling modes and channel power structures.

Design/methodology/approach

Based on the game theory models, this paper investigates the interaction between the manufacturer and the online platform under four different scenarios. The optimal solutions of four models are provided. Through comparison analyses, this paper evaluates the impacts of platform selling mode and channel power structure on the pricing and platform service decisions and the members’ profits.

Findings

The manufacturer prefers the MS power structure in any platform mode. The online platform prefers the PS (MS) power structure under a low (high) service cost efficiency in the reselling platform mode, while prefers the PS and VN power structures in the agent platform mode. Moreover, the manufacturer prefers the agent (reselling) platform mode under a low (high) service cost efficiency in any power structure. The online platform prefers the reselling platform mode in the MS and PS power structures, while prefers the reselling (agent) platform mode under a low (high) service cost efficiency in the VN power structures.

Originality/value

The analysis result provides important managerial implications that help the supply chain members develop a better understanding of the selection of the platform selling mode and the effect of the channel power structure in the presence of platform service.

Details

Industrial Management & Data Systems, vol. 124 no. 5
Type: Research Article
ISSN: 0263-5577

Keywords

Article
Publication date: 13 December 2022

Lixi Zhou, Tijun Fan, Lihao Zhang and Luyu Chang

With the development of e-commerce and mobile payment, platform sales become unstoppable, and many manufacturers also encroach on online market by establishing direct selling

Abstract

Purpose

With the development of e-commerce and mobile payment, platform sales become unstoppable, and many manufacturers also encroach on online market by establishing direct selling channels. Channel conflict intensifies in online market and quality differentiation and is widely used in business practice as an effective way to alleviate such a competition. The authors study a retail platform's sales strategy and interactions with an upstream manufacturer's encroachment strategy in this paper. Unlike most online marketplace and encroachment research, product quality selection is also engaged in the present research to capture the motivation above.

Design/methodology/approach

The authors analyze a game-theoretical model that the platform as the first/second mover participates in strategic decision-making, and then jointly decides the product quality level with manufacturer.

Findings

The authors find that encroachment always profits the manufacturer and almost hurts the platform. Interestingly, the first-mover advantage can help the platform guide the manufacturer encroachment and promote a “win–win” situation when product quality level is relatively slight or obvious. Nevertheless, the second-mover advantage can help the platform alleviate the profit loss caused by encroachment when product quality level is moderate. Furthermore, suffered from encroachment loss, the platform can make a credible threat by sales termination to restrain manufacturer encroachment.

Originality/value

This paper innovatively explores the strategic interaction between manufacturer encroachment and quality differentiation in a platform supply chain, and further analyzes the first-mover advantage in this interaction, which fills the gaps of previous platform research and has great significances to enterprise production and operational decision in business practice.

Details

Industrial Management & Data Systems, vol. 123 no. 3
Type: Research Article
ISSN: 0263-5577

Keywords

Article
Publication date: 9 November 2023

Lubing Lyu and Haixia Zhao

This paper aims to study the interplay between a risk-averse national brand manufacturer's (NBM) selling mode decision and a risk-neutral e-platform's private brand (PB…

Abstract

Purpose

This paper aims to study the interplay between a risk-averse national brand manufacturer's (NBM) selling mode decision and a risk-neutral e-platform's private brand (PB) introduction decision.

Design/methodology/approach

A game theory model is used to solve selling mode decision, that is whether transform the selling mode from the wholesale mode to the marketplace mode, and PB introduction decision, that is, whether introduce the PB.

Findings

The results show that for the NBM, under certain condition, the NBM's selling mode decision is not affected by the e-platform's PB introduction decision. High revenue-sharing rate is conducive only when the difference in consumer preference between the PB and the national brand (NB) is small. The NBM's risk aversion will improve the applicability of the marketplace mode. For the e-platform, high PB preference of consumers and risk-averse behavior of the NBM is not conducive to PB introduction. For the supply chain, scenarios that the NB monopolizes the market under the wholesale mode and PB introduction under the marketplace mode should be prevented. PB introduction under the wholesale mode will become the only equilibrium with the increase of risk aversion of the NBM. Finally, the authors extend the scenario that consumers prefer the PB and the e-platform is risk-averse enterprise and find that PB introduction under the wholesale mode is detrimental to the NBM but beneficial to the supply chain. The impact of consumers' PB preference on the e-platform's PB introduction is opposite to the basic model. The impact of the e-platform's risk aversion on game equilibrium is opposite to that of the NBM's risk aversion.

Originality/value

This paper is first to study selling mode decision and PB introduction decision when considering enterprises' risk-averse attitude.

Details

Kybernetes, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0368-492X

Keywords

Article
Publication date: 11 July 2023

Yuan Shi, Ting Qu, Jia Shi and Lan Huang

The paper aims to clarify the effects of brand differentiation on the platform's formulation of channel strategy and help the online platform formulate the optimal channel…

432

Abstract

Purpose

The paper aims to clarify the effects of brand differentiation on the platform's formulation of channel strategy and help the online platform formulate the optimal channel strategy, which involves selecting a proper selling mode for each brand.

Design/methodology/approach

The paper develops a multistage game model consisting of one online platform and two competing manufacturers with differentiated brands and examines the effects of brand differentiation on these three channel members' profits under each candidate channel strategy.

Findings

The results show that the platform prefers to offer the reselling mode for both brands when the brand differentiation is low, and this preference will be enhanced by the decrease in order fulfilment cost. By contrast, when the brand differentiation is high, it will offer the reselling mode for the premium brand but the marketplace service for the economy brand if the order fulfilment cost is not high; or the marketplace mode will be offered to both brands if this cost is high.

Research limitations/implications

This study assumes that the order fulfilment costs of platform and manufacturer are fixed and symmetric. Therefore, researchers are encouraged to consider asymmetric costs of order fulfilment.

Practical implications

The paper guides the online platform to formulate the optimal channel strategy for differentiated brands and provides managerial insights for differentiated brands entering online markets.

Originality/value

This paper explores platforms' optimal channel strategy by jointly considering the effects of brand differentiation and investigates the impacts of brand differentiation on the optimal decision making under four candidate options. Moreover, this paper has been extended to examine the case when the manufacturers' production costs cannot be neglected.

Details

Industrial Management & Data Systems, vol. 123 no. 8
Type: Research Article
ISSN: 0263-5577

Keywords

Article
Publication date: 5 January 2023

Xiaogang Cao, Jing Yuan, Hui Wen and Cuiwei Zhang

Different information sharing mechanisms and online platform information sharing to different charging models are compared and analyzed.

Abstract

Purpose

Different information sharing mechanisms and online platform information sharing to different charging models are compared and analyzed.

Design/methodology/approach

This paper uses the Stackelberg game model to study the demand information sharing and pricing decisions.

Findings

The results show that: (1) the retailer's pricing strategy is the highest when both of them obtain information, while the manufacturer's pricing strategy is affected by the related attributes of different products, such as the sensitivity of consumers to product prices; (2) in the online platform sales model, the demand information data sharing owned by the online platform can bring more expected profits to the whole supply chain and the members of the supply chain, and the higher the accuracy of the information, the higher the expected profit; (3) when the cost of obtaining demand information is zero, that is, the online platform shares the information data about market demand free of charge, the retailer and manufacturer tend to obtain information; (4) for the online platform, charging a certain fee can achieve higher expected profits than free sharing.

Originality/value

Based on the single platform online sales model, this paper uses the Stackelberg game model to study the demand information sharing and pricing decision of a manufacturer and a retailer selling products through the same online platform.

Details

Kybernetes, vol. 53 no. 3
Type: Research Article
ISSN: 0368-492X

Keywords

Article
Publication date: 5 November 2020

Dongsheng Yang and Minghui Xu

In recent years, with the rapid development of the Internet and e-commerce, the online retail business has grown rapidly. E-commerce platforms can track different click data to…

Abstract

Purpose

In recent years, with the rapid development of the Internet and e-commerce, the online retail business has grown rapidly. E-commerce platforms can track different click data to understand consumer behavior and demand preferences, so as to make better demand forecasts, and strategically share this information with upstream suppliers. When the platform charges a certain fee for the shared data, the suppliers face the question of whether to purchase demand information. This article aims to analyze the influence of price competition and advertising competition on the suppliers' decisions to purchase information and the online platform for data pricing.

Design/methodology/approach

By using static game with incomplete information, this paper explores information-sharing strategies of an online platform with two competitive brand suppliers. The authors use Nash game to analyze the suppliers' purchasing information decision and then obtain the optimal information price of the online platform with information-sharing contract.

Findings

This paper shows that demand information sharing benefits both the platform and the suppliers. Without information contracts, the online platform is willing to share demand information with at least one supplier. Especially, when the consumer's sensitivity to advertising is larger and the commission fee charged by the online platform is small, the online platforms will share information with only one supplier. Based on the game outcomes between the suppliers, two pricing strategies for information are proposed under which at least one supplier purchases information. If the consumers are less (more) sensitive to advertising competition, pricing strategy of the online platform induces both suppliers (only one supplier) to purchase information.

Originality/value

At present, most of the information-sharing articles are based on the traditional purchase and sale mode. Based on the background of e-commerce, this paper examines the online platform's information-sharing strategies, which has certain innovation. In addition, the results show that the information-sharing strategy of the online platform is affected by both the price and advertising competitiveness, which provides a new expansion and supplement for the information-sharing literature.

Details

Journal of Contemporary Marketing Science, vol. 3 no. 3
Type: Research Article
ISSN: 2516-7480

Keywords

Article
Publication date: 23 October 2023

Yating Li, Ting Chen, Xinxin Zhang and Jiahang Yuan

Eco-innovation products, which means achieving more efficient and responsible use of resources and reducing the detrimental impact on the environment, can win a competitive…

Abstract

Purpose

Eco-innovation products, which means achieving more efficient and responsible use of resources and reducing the detrimental impact on the environment, can win a competitive advantage for the enterprises. But it is not easy to implement due to the high cost of eco-innovative technologies development, the uncertainty of market needs and return risk of investment. Many enterprises seek collaborations from their upstream suppliers to jointly carry out eco-innovation, such as Apple, IBM and Nike. A unique feature of collaboration is that efforts by one party enhance the marginal value of the other party's efforts. However, the collaboration will make the partner know the eco-innovation technology and prompt the partner to encroach the market to sell competitive products by herself. Motivated by this observation, this paper considers the optimal collaboration strategy on eco-innovation between upstream and downstream supply chain member and the optimal encroachment strategy of upstream supplier in a supply chain.

Design/methodology/approach

This paper models a supply chain wherein a supplier provides products or materials for her manufacturer and cooperates with her manufacturer in eco-innovation. Also, the supplier could encroach on the market to sell similar products by herself. Then this paper uses game theory and mathematical modeling to do relative analysis.

Findings

The analysis reveals several interesting insights. First, eco-innovation collaboration makes supplier encroachment no longer only rely on the encroachment cost. The delayed realized eco-innovation efficiency information also plays a vital role. Second, different from previous research, the authors find the manufacturer's preference for supplier encroachment depends on the uncertainty of eco-innovation efficiency and potential market demand. Third, both partial and full encroachment strategies of the supplier can effectively improve the eco-innovation level.

Originality/value

The paper is the first to take the interplay between collaboration and encroachment into account in a supply chain. The results caution enterprises and policymakers to take vertical collaboration and delayed realized information into account in the competitive supply chain before making any operational decisions. Furthermore, the authors propose that governmental intervention aimed at stimulating supplier encroachment in appropriate circumstances can contribute to the improved environmental performance of products.

Details

Kybernetes, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0368-492X

Keywords

Article
Publication date: 15 February 2023

Bing Yang

Motivated by the real-world practice that the boom of the online selling induces a higher product return as well, selecting which online channel mode indicates who takes ownership…

Abstract

Purpose

Motivated by the real-world practice that the boom of the online selling induces a higher product return as well, selecting which online channel mode indicates who takes ownership over the product and thus bears the loss of the product return. This paper aims to seek the optimal online channel modes for the two members in a platform supply chain in the presence of product returns.

Design/methodology/approach

This study aims to develop a platform supply chain that consists of one platform company and one supplier. Along with an offline distribution channel, the supplier can choose two alternative online selling modes (i.e. the reselling and agency modes) to sell its product through the online marketplace. This paper applies Stackelberg game to derive the equilibrium with different business scenarios and selects the optimal online channel modes for two parties, respectively. Moreover, this paper extends to a different supply chain with a reverse channel leadership and a different product return policy for testing the robustness.

Findings

Several interesting and important results are derived in this paper. Firstly, it is found that the relative pricing are largely relied on the costs of two channels. Secondly, the platform supply chain may benefit from a pure channel rather than the dual-channel when this channel enjoys a relatively low cost and/or a sufficiently high consumer preference. Then, the platform and the supplier act contradictorily when selecting their optimal online channel modes. To be specific, the platform motivates to choose the online reselling mode when both the commission rate and the slotting fee are relatively low, whereas the supplier is likely to select the online agency mode under this circumstance. Finally, a win-win situation in regards to the optimal online channel mode for two parties is achievable with numerical experiments.

Practical implications

Based on the analytical studies, the results derived in the authors’ work can provide managerial insights to assist the supplier and the platform company in determining the operational decision and selecting the optimal online channel mode to deal with consumer returns. In addition, appropriate commission rate along with slotting fee will make both parties achieve a win-win situation in determining their optimal online channel mode.

Originality/value

To the authors’ best knowledge, this paper makes the first move to determine the optimal online channel mode in the content of consumer returns and study how it is affected by different product return policies.

Details

Kybernetes, vol. 53 no. 5
Type: Research Article
ISSN: 0368-492X

Keywords

Article
Publication date: 25 December 2023

Peng Ma, Qin Yuan and Henry Xu

Previous studies have rarely integrated the financing modes of a capital-constrained manufacturer with the choices of online sales strategies. To address this gap, the authors…

Abstract

Purpose

Previous studies have rarely integrated the financing modes of a capital-constrained manufacturer with the choices of online sales strategies. To address this gap, the authors study how a manufacturer selects optimal financing modes under different sales strategies in three dual-channel supply chains.

Design/methodology/approach

This paper considers three sales strategies, namely, combining a traditional retailer channel with one of the direct selling, reselling and agency selling channels, and two common financing modes, namely, bank financing and retailer financing. The authors obtain equilibrium outcomes of the manufacturer and traditional retailer and then provide the conditions for them to select optimal financing modes under three sales strategies.

Findings

The results indicate that the manufacturer’s financing decisions rely on the initial capital and interest rates, and the manufacturer selects retailer financing only if the initial capital is relatively larger. In terms of financing mode options, the retailer financing mode is more beneficial for the manufacturer under the three sales strategies. From the perspective of sales strategies, the direct selling model is more beneficial. In addition, the higher the consumer acceptance of the online channel, the more profits the manufacturer obtains.

Practical implications

This paper provides suggestions on how the capital-constrained manufacturer chooses financing modes and sales strategies.

Originality/value

This paper integrates the financing mode and different sales strategies to investigate the manufacturer’s optimal operational decisions. These sales strategies allow us to investigate the manufacturer’s optimal financing modes in the presence of both different financing modes and sales strategies.

Details

Kybernetes, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0368-492X

Keywords

Article
Publication date: 13 March 2024

Nan Chen, Jianfeng Cai, Devika Kannan and Kannan Govindan

The rapid development of the Internet has led to an increasingly significant role for E-commerce business. This study examines how the green supply chain (GSC) operates on the…

Abstract

Purpose

The rapid development of the Internet has led to an increasingly significant role for E-commerce business. This study examines how the green supply chain (GSC) operates on the E-commerce online channel (resell mode and agency mode) and the traditional offline channel with information sharing under demand uncertainty.

Design/methodology/approach

This study builds a multistage game model that considers the manufacturer selling green products through different channels. On the traditional offline channel, the competing retailers decide whether to share demand signals. Regarding the resale mode of E-commerce online channel, just E-tailer 1 determines whether to share information and decides the retail price. In the agency mode, the manufacturer decides the retail price directly, and E-tailer 2 sets the platform rate.

Findings

This study reveals that information accuracy is conducive to information value and profits on both channels. Interestingly, the platform fee rate in agency mode will inhibit the effect of a positive demand signal. Information sharing will cause double marginal effects, and price competition behavior will mitigate such effects. Additionally, when the platform fee rate is low, the manufacturer will select the E-commerce online channel for operation, but the retailers' profit is the highest in the traditional channel.

Originality/value

This research explores the interplay between different channel structures and information sharing in a GSC, considering price competition and demand uncertainty. Besides, we also considered what behaviors and factors will amplify or transfer the effect of double marginalization.

Details

Industrial Management & Data Systems, vol. 124 no. 4
Type: Research Article
ISSN: 0263-5577

Keywords

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