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This study aims to focus on the optimal green R&D of a capital-constrained supply chain under different channel power structures as well as the impact of capital constraint, financing cost, channel power structure and cost-reducing efficiency on green R&D and supply chain profitability.

A two-echelon supply chain is considered. The upstream firm engages in green R&D but has capital constraints that can be overcome by external financing. Green R&D is beneficial to reduce production costs and increase consumer demand. Based on whether or not the upstream firm is capital constrained and dominates the supply chain, four models are developed.

Capital constraints significantly lower green R&D and supply chain profitability. Transferring leadership from the upstream to the downstream firms leads to higher green R&D levels and downstream firm profitability, whereas the upstream firm's profitability is increased (decreased) if green R&D investment efficiency is high (low) enough. Greater financing costs reduce green R&D and downstream firm profitability; however, the upstream firm's profitability under the model in which it functions as the follower increases if the initial capital is sufficient. More importantly, empirical analysis based on practice data is used to verify the theoretical results reported above.

This study reveals how upstream firms in supply chains decide green R&D decisions in situations with capital constraints, providing managers and governments with an understanding of the impact of capital constraint, channel power structure, financing cost and cost-reducing efficiency on supply chain green R&D and profitability.

The major contributions are the exploration of supply chain green R&D by taking into consideration channel power structures and cost-reducing efficiency and the validation of theoretical results using practice data.

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.

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.

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.

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.

Strategy.

The case is suitable for upper level undergraduate business and MBA students.

FOTILE, one of the fam ily businesses in Zhejiang, Ch ina, has now become the leading brand in the Ch ina kitchen appliance industry and has successfully entered into the global market. It has gone from a traditional family business in the 1980s to a modern enterprise because of the successful transformation from the first generation (Father: Lixiang Mao) to the second generation (Son: Zhongqun Mao) and the blending of a family business with the modern enterprise system. They both have strong beliefs that family businesses have their own advantages, but they have different ways and strategies of running the business. The case describes the process of how the father and his son worked together designing the strategies to successfully grow FOTILE.

The case is a vehicle for exploring strategies to operate a family business, to successfully develop a sustainability model, to manage a growing company through its entrepreneurial stage, and to merge western business culture with Chinese Confucian culture. It should help students to: explore strategies of managing/leading a family business and transferring successfully the business from one generation to the next; understand the importance of marketing, focusing on overall strategy and sustainability; know how to identify market opportunities, exhibit start-up intent, perform start-up planning, mission development, and feasibility analysis, and acquiring initial resources; and appreciate the close link between culture and strategy.

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