Search Results (10)

The rise of platform competition, driven by the rapid emergence of new e-commerce platforms, has fundamentally reshaped traditional supply chain structures. Under platform encroachment, the manufacturer faces the critical challenge of optimizing their channel strategies to expand market demand and increase profit. To address this, this paper develops a game model considering a manufacturer, a retailer, and two e-commerce platforms (an incumbent and an entrant). The model examines three channel strategies: the single-platform strategy, the synchronous channel strategy, and the reset channel strategy. This paper analyzes how the platform service differentiation and the unit channel setup cost of the manufacturer under the reset channel strategy influence pricing decisions and the manufacturer’s channel strategy. The findings indicate that the synchronous channel strategy yields a higher product price than the reset channel strategy while maximizing dual-platform demand when the extent of platform service differentiation is moderate and the unit channel setup cost is low. Under these conditions, the synchronous and reset channel strategies yield higher expected profits for the manufacturer and retailer than the single-platform strategy. Moreover, the best option for the manufacturer is the synchronous channel strategy when the extent of platform service differentiation is moderate and the unit channel setup cost is relatively high, which achieves a Pareto improvement for all participants. However, the reset channel strategy benefits the entrant platform when the unit channel setup cost is low. The study provides a theoretical foundation for the manufacturers to optimize their channel configurations and effectively adapt to platform competition. Full article

Largely motivated by the industrial practice in which a platform giant will encroach online retailing by introducing private label (PL) products, this paper aims to investigate the optimal introduction decision for a platform and identify the best sales format, between the reselling format and the agency format, for a manufacturer in an e-commerce platform supply chain. In response to these two sales formats, this paper characterizes and proposes three different PL product introduction strategies, including No Introduction, Partial Introduction, and Full Introduction. By developing a game-theoretic framework and applying the Karush–Kuhn–Tucker optimality, this paper examines the optimal PL product introduction decision and the best sales format. With analytical studies and numerical experiments, several significant implications are derived in this paper. For example, it is first found that the consumer preference for the platform and the quality of the PL products are two key factors influencing the platform’s PL product introduction, with associated effects differing notably. Secondly, improving the PL products’ quality does not necessarily lead to an increased profit for the platform. It will also not lead to a loss in profit for the manufacturer. Lastly, the best sales formats for the manufacturer are significantly influenced by the PL products’ introduction strategy chosen by the platform. Full article

This paper investigates manufacturer encroachment on a sustainable supply chain, where the manufacturer holds exclusive information on product greenness and is responsible for both corporate social responsibility (CSR) and greening. The manufacturer and the retailer play a signaling game whereby CSR effort and wholesale price serve as joint green signals. Findings reveal that, firstly, encroachment induces higher CSR efforts from manufacturers. When customers exhibit a strong CSR preference, the resulting CSR increment leads to increased offline demand and drives up both wholesale and retail prices in a mutually beneficial manner. This phenomenon is referred to as the CSR effect, yielding a win-win encroachment. Secondly, when signaling product greenness to highly CSR-sensitive customers, the high-greenness manufacturer principally distorts her CSR effort downward to an extent unprofitable for the low-greenness manufacturer to mimic and subordinately distorts the wholesale price downward to counter CSR-induced demand decrement and mitigate CSR cost pass-through downstream. Finally, the win-win encroachment pattern is characterized by encroachment profit and signal expense sharing, with encroachment strengthening downward-distorted signaling while signaling weakens the CSR effect. These insights contribute valuable guidance for green manufacturers in CSR decision-making, which functions as a component of green signaling and facilitates transitioning to dual-channel sustainable supply chains. Full article

Healthcare is considered one of the necessities for sustaining life. However, frequent emergencies raise the risk of supply chain disruption, seriously threatening people’s lives and health security. Therefore, building a resilient healthcare supply chain is an important initiative to manage the healthcare crisis effectively. Based on the secondary supply chain formed by medical supply manufacturers and retailers, this paper constructs an evolution game model of resilience investment decisions under the non-disruption and disruption symmetry scenarios of the supply chain and analyzes the stabilization strategies employed by both parties based on their asymmetry strategy choices. Subsequently, the numerical simulation is used to analyze the impact of various parameters on the evolutionary results and their evolutionary trends. The results of the study show that additional benefits from resilience investment, potential costs, disruption losses, market encroachment revenue, “free-rider” benefits, additional benefit increase coefficient, resilience investment reduction coefficient, disruption loss reduction coefficient, additional unit cost reduction coefficient, and market encroachment revenue coefficient all influence the resilience investment decisions. Finally, based on the simulation results, specific recommendations are formulated to improve the resilience of the healthcare supply chain. Full article

Online retail platforms such as Amazon and Tmall have the ability to create personalized recommendations based on the consumer’s browsing history, purchase history, and preferences by investing in data analytics capability. In practice, manufacturers may encroach on the retail market through the agency channel that sells products directly to online consumers in addition to wholesale products to retail platforms through the reselling channel. In this study, we develop a game-theoretic model to study the interplay between the manufacturer’s encroachment and the online retail platform’s data analytics capability investment. Our outcomes reveal that the conditions for the manufacturer to encroach become more lenient if the platform invests in data analytics capability, and we show that the investment in data analytics capability can lead to a Pareto improvement and the manufacturer can free ride on the platform’s investment. Moreover, we found that the manufacturer’s encroachment always creates more incentives for the platform to enhance the investment level in data analytics capability. Our research in this study provides useful insights for managers to make encroachment decisions and data analytics capability investment decisions with the manufacturer who sells through the online retail platform. Full article

This paper examines remanufacturing decisions in the context of outsourcing, which have important implications for environmental and economic sustainability. Specifically, we model the competition between an experienced Original Equipment Manufacturer (OEM) and an emerging Independent Remanufacturer (IR). The OEM can decide the manufacturing quantities of a brand-new product, and the IR can collect the OEM’s used products and remanufacture them for resale. The information structure is asymmetric, as only the OEM knows the market size. We identify the equilibrium quantities of both firms, which are shown to be strongly influenced by the IR’s cost efficiency and the consumers’ willingness to pay for the IR’s products. Asymmetric information also plays an important role. Is it always better to hide information? Interestingly, the OEM makes the most profit when the IR has full information on the market size. We find that when the market size is high, the OEM’s and IR’s production and encroachment decisions are the same as when both parties have equal information. The OEM also does not benefit from hiding market information from the IR when the market size is low. Indeed, if the IR’s cost efficiency is moderate and the market size is low, the OEM’s profits are actually hurt by hiding market information. Here, the diminished profits from hiding market information arises from the OEM’s substantially reduced production quantity to prevent IR encroachment. The OEM’s production quantity is higher if the OEM shares market information and the IR encroaches on the market. Thus, by sharing information, the OEM’s benefit gained from increased production quantity outweighs the cost of losing its monopoly. Additionally, consumer surplus increases when the IR engages in remanufacturing, while social surplus increases only when either the OEM’s or IR’s product is strongly favored. Even if the IR does not engage in remanufacturing, the resulting OEM monopoly can still lead to a higher environmental impact under certain market conditions. This arises when the OEM lowers production quantities when the IR encroaches on the market, thereby improving the overall environmental impact. Therefore, policymakers seeking to improve environmental and economic sustainability by encouraging IRs must consider these complex competition dynamics and consumer preferences, as they indirectly influence OEMs’ production decisions. Full article

Although the impact of government subsidies on private innovation has been widely recognized and researched in numerous studies, few have considered the increasingly prevalent phenomenon of supply chain encroachment in their analysis. This paper explores this phenomenon through a game-theoretic model that takes into account a government entity, a supplier, and a manufacturer. The primary aim is to understand how the government can make optimal subsidy decisions when the supplier moves into the supply chain. Several interesting conclusions have been drawn: (1) under governmental innovation subsidies, the supplier will raise the price of the new technology to obtain more potential revenue, which is termed the inverse wholesale price effect; (2) different kinds of innovation subsidies are shown to have varied effects on R&D, production, and consumption behavior; and (3) different subsidy strategies are made compatible with the characteristics of innovative activities to maximize social welfare as much as possible. These findings shed light on inconsistent results surrounding the impacts of government subsidies on private innovations in the existing literature, providing municipalities with helpful guidance when encouraging private innovation initiatives amid supply chain encroachment. Full article

Manufacturers with limited funds often seek financial help from outside, usually banks or platforms. However, introducing store brand products (platform encroachment) makes platforms form a competitive and cooperative relationship with manufacturers. To investigate how platform encroachment affects the optimal production decisions and the manufacturer’s financing strategy, this paper establishes a stylized model to capture the strategic interaction between a manufacturer, a platform and a bank. The manufacturer sells a national brand product directly through the platform, which owns a competitive store brand product. By analyzing the equilibrium results, we show that although platform encroachment may reduce the manufacturer’s financing cost, product competition always makes the manufacturer bear more losses. In addition, our results also show that the manufacturer is always willing to adopt the platform financing strategy if the platform does not encroach. However, under platform encroachment, the bank financing strategy may be a better choice for the manufacturer, as long as the commission rate is low enough. Moreover, the platform financing strategy is the Pareto-dominant strategy when the commission rate is high. Finally, we verify the accuracy and robustness of the conclusions of the basic model through numerical analysis and extension. Using the results we derive, we explain the market practices and provide valuable guidelines for manufacturers to choose financing strategies under platform encroachment. Full article

Manufacturer channel encroachment is a common phenomenon in the current e-commerce supply chain, which has been well studied. This study develops a multi-agent-based model of the e-platform supply chain to analyse manufacturers’ channel encroachment strategies and supply chain evolution. Through both direct sales channels and e-commerce platforms, manufacturers can sell two complementary products of varying quality. Consumers who have preferences compare the pricing information gathered from manufacturers through different channels before selecting the one that generates the best utility. At the end of each period, the manufacturers make a price adjustment using the genetic algorithm. We look at the supply chain evolution process through multi-period simulations and discuss the factors that influence encroachment decisions. We find that manufacturers’ channel encroachment is detrimental to the profitability of the e-commerce platform. Consumers’ channel preferences and quality preferences benefit the e-commerce platform and can discourage manufacturers’ encroachment decisions. In addition, increases in encroachment costs and commission rates can reduce manufacturers’ propensity for channel encroachment. Full article

Carbon emission reduction and achieving carbon neutrality has become an inevitable trend in the sustainable development era. We investigate the manufacturer’s encroachment and carbon emission reduction decisions considering government cap-and-trade regulations and consumers’ low-carbon preference. The equilibrium decisions for the four scenarios are analytically obtained and compared based using the Stackelberg game. A comparison with and without cap-and-trade regulation under two encroachment decisions regarding member’s profits and carbon emission reduction levels are conducted. It is shown that the encroachment decision is always advantageous for the manufacturer if the government decides not to implement cap-and-trade regulation, and the retailer always loses profit. Moreover, if the carbon quota is sufficient, cap-and-trade regulation benefits the manufacturer. Otherwise, the manufacturer’s encroachment decision depends on the appropriate initial unit amount of carbon emission and unit carbon price. The retailer’s profit may not always be hurt by the manufacturer’s encroachment with cap-and-trade regulation; unless the unit carbon price exceeds a certain threshold, a higher consumer’s low-carbon preference in the encroachment scenario reduces more carbon emissions than in the no-encroachment scenario for the manufacturer. Further, the rising platform commission rate causes the platform profit to increase first and then decrease; the platform profit will slightly decrease if both products become more substitutes. Full article