scholarly journals Strategic Integration Decision under Supply Chain Competition in the Presence of Online Channel

Symmetry ◽  
2020 ◽  
Vol 13 (1) ◽  
pp. 58
Author(s):  
Subrata Saha ◽  
Izabela Nielsen
Keyword(s):  
Supply Chain ◽  
Supply Chains ◽  
Strategic Integration ◽  
Pricing Decisions ◽  
Substitutable Products ◽  
Product Pricing ◽  
Supply Chain Competition ◽  
Strategic Cooperation ◽  
Online Channel ◽  
Vertical Level

This study explores the pricing decisions of substitutable products for two competing supply chains in the presence of an online channel. Each supply chain consisting of a single manufacturer and an exclusive retailer and one of the manufacturers distributes products through the online channel. We examine optimal decisions under five scenarios to explore how the strategic cooperation between two manufacturers at the upstream horizontal level or with the retailer at the vertical level affects product pricing decisions and the performance of two supply chains? The results reveal that decisions for cooperation with competing manufacturers and opening an online channel are correlated. In the absence of an online channel, cooperation with their respective retailer can lead to a higher supply chain profit. However, if a manufacturer opens an online channel, then cooperation with competing manufacturers can lead to a higher supply chain profit. Under the vertical integration, total supply chain profit might be lower compared to a scenario where members in each supply chain remain independent. Consumers also need to pay more for products.

scholarly journals Interactions of Bargaining Power and Introduction of Online Channel in Two Competing Supply Chains

2018 ◽  
Vol 2018 ◽  
pp. 1-18 ◽  
Author(s):  
Jie Wei ◽  
Tong Shao ◽  
Jing Zhao
Keyword(s):  
Supply Chain ◽  
Supply Chains ◽  
Numerical Approach ◽  
Optimal Pricing ◽  
Online Retailing ◽  
Pricing Decisions ◽  
Dual Channel ◽  
Maximal Profit ◽  
Competition Ability ◽  
Online Channel

This paper studies the effect of dual-channel format on supply chain’s competition ability and the effect of different bargaining powers on the competition between two supply chains and the optimal pricing decisions of all supply chain members when one supply chain introduces an online retailing channel. We develop four game models and obtain the optimal pricing decisions in closed form of these models and give some sensitivity analysis through numerical approach. Some new managerial insights are obtained as follows: Regardless of the two supply chain members’ bargaining forms, the optimal price, the maximal demand, and the maximal profit decrease as the self-price sensitivity decreases. The industry holds advantage in getting higher profit when the supply chain without online retailing channel is led by the retailer. In addition, we find that a manufacturer as a leader of its supply chain can get more profit when the competing supply chain’s leader is the manufacturer than when the competing supply chain’s leader is the retailer.

Strategic Inventories Under Supply Chain Competition

2021 ◽  
Author(s):  
Xi Li ◽  
Yanzhi Li ◽  
Ying-Ju Chen
Keyword(s):  
Supply Chain ◽  
Supply Chains ◽  
Distribution Channel ◽  
Problem Definition ◽  
Supply Chain Competition ◽  
Managerial Implications ◽  
Holding Cost ◽  
Inventory Holding ◽  
Period Model

Problem definition: We consider the effects of strategic inventory (SI) in the presence of chain-to-chain competition in a two-period model. Academic/practical relevance: Established findings suggest that SI may alleviate double marginalization and improve the efficiency of a decentralized distribution channel. However, no studies consider the role of SI under chain-to-chain competition. Methodology: We build a two-period model consisting of two competing supply chains, each with an upstream manufacturer and an exclusive retailer. The retailers compete on either price or quantity. We characterize the firms’ strategies under the concept of perfect Bayesian equilibrium. We consider cases where contracts are either observable or unobservable across supply chains. Results: (1) SI still exists under chain-to-chain competition. Retailers may carry more inventory when the competition becomes fiercer, which further intensifies the supply chain competition. (2) Different from the existing findings, SI may backfire and hurt all firms. Interestingly, firms may benefit from a higher inventory holding cost. (3) Under supply chain competition, the prisoner’s dilemma can arise if competition intensity is intermediate; in other words, manufacturers are better off without strategic inventory, and yet they cannot help allowing strategic inventory, which is the unique equilibrium. Managerial implications: Despite its appeal among firms of a single supply chain, the role of SI is altered or even reversed by chain-to-chain competition. Conventional wisdom on SI should be applied with caution.

scholarly journals Supply Chain Competition: A Market Game Approach

2020 ◽  
Vol 66 (12) ◽  
pp. 5648-5664 ◽  
Author(s):  
C. Gizem Korpeoglu ◽  
Ersin Körpeoğlu ◽  
Soo-Haeng Cho
Keyword(s):  
Supply Chain ◽  
Supply Chains ◽  
Operations Management ◽  
Wholesale Price ◽  
Market Price ◽  
Market Game ◽  
Wholesale Market ◽  
Supply Chain Competition ◽  
Local Supply ◽  
Buyer Power

We study supply chains where multiple suppliers sell to multiple retailers through a wholesale market. In practice, we often observe that both suppliers and retailers tend to influence the wholesale market price that retailers pay to suppliers. However, existing models of supply chain competition do not capture retailers’ influence on the wholesale price (i.e., buyer power) and show that the wholesale price and the order quantity per retailer do not change with the number of retailers. To overcome this limitation, we develop a competition model based on the market game mechanism in which the wholesale price is determined based on both suppliers’ and retailers’ decisions. When taking into account retailers’ buyer power, we obtain the result that is consistent with the observed practice: As the number of retailers increases, each retailer’s buyer power decreases, and each retailer is willing to pay more for her order, so the wholesale price increases. In this case, supply chain expansion to include more retailers (or suppliers) turns out to be more beneficial in terms of supply chain efficiency than what the prior literature shows without considering buyer power. Finally, we analyze the integration of two local supply chains and show that although the profit of the integrated supply chain is greater than the sum of total profits of local supply chains, integration may reduce the total profit of firms in a retailer-oriented supply chain that has more retailers than suppliers. This paper was accepted by Charles Corbett, operations management.

scholarly journals The Optimal Production Decision of Competing Supply Chains When Considering Green Degree: A Game-Theoretic Approach

2020 ◽  
Vol 12 (18) ◽  
pp. 7413
Author(s):  
Jiguang Wang ◽  
Jianhong Chang ◽  
Yucai Wu
Keyword(s):  
Supply Chain ◽  
Supply Chains ◽  
Wholesale Price ◽  
Dominant Strategy ◽  
Green Product ◽  
Theoretic Approach ◽  
Optimal Production ◽  
Supply Chain Competition ◽  
Game Theoretic ◽  
The Difference

Nowadays, the green supply chain has become an exciting concept in academic societies. This paper focuses on the optimal production decisions of two competing supply chains from the perspective of green degree. The manufacturers in each supply chain have two options—producing a green product or a non-green product. Game theory is applied to study four decision scenarios, which are derived from the difference in the products of the two supply chains. This study investigates the influence of inter-supply-chain competition on the wholesale price, green degree, and profits of the supply chain members. The results indicate that the inter-supply-chain competition has a negative correlation with the wholesale price. The inter-supply-chain competition has a significant impact on green degree in the four decision scenarios. In addition, green products are not always the dominant strategy of manufacturers. Both the competitors’ product decisions and the degree of inter-supply-chain competition should be considered. Finally, weak inter-supply-chain competition is beneficial to the leader supply chain, while strong competition is beneficial to the follower supply chain.

Coordination contract for a competitive pharmaceutical supply chain considering corporate social responsibility and pricing decisions

2020 ◽  
Vol 54 (5) ◽  
pp. 1515-1535 ◽  
Author(s):  
Maryam Johari ◽  
Seyyed-Mahdi Hosseini-Motlagh
Keyword(s):  
Corporate Social Responsibility ◽  
Supply Chain ◽  
Social Responsibility ◽  
Cost Sharing ◽  
Stackelberg Game ◽  
Market Demand ◽  
Pharmaceutical Supply Chain ◽  
Pricing Decisions ◽  
Substitutable Products ◽  
Corporate Social

Corporate social responsibility (CSR) and pricing decisions are proposed for a competitive two-level pharmaceutical supply chain (PSC) comprising two pharma-manufacturers and one pharma-retailer. In the investigated PSC, the pharma-manufacturers competitively invest in the CSR effort to produce a new medicine and sell two substitutable products to the market through the pharma-retailer, deciding on selling prices of manufacturers’ products. The PSC under consideration is modeled in three decision-making structures, i.e., decentralized, centralized, and coordinated models. In the decentralized model, the pricing and CSR decisions are individually obtained using a pharma-manufacturers–Stackelberg game structure. In the centralized model as a benchmark, the best performance of the entire PSC system is achieved. Finally, to encourage all PSC members to agree on the coordination plan, a CSR cost-sharing contract is proposed. Our results reveal that under competitive environment, the proposed CSR cost-sharing contract is able to increase market demand by significantly decreasing selling prices and increasing level of the CSR efforts.

Supply Chain Competition with Information Sharing

2011 ◽  
Vol 486 ◽  
pp. 309-312
Author(s):  
Rong Yao He ◽  
Zhong Kai Xiong ◽  
Yu Xiong
Keyword(s):  
Supply Chain ◽  
Supply Chains ◽  
Information Sharing ◽  
Optimal Pricing ◽  
Market Demand ◽  
Pricing Policy ◽  
Supply Chain Competition ◽  
Demand Information ◽  
Total Profit

Given the case of two competing supply chains each consisting of one manufacturer and one retailer, we explore whether the retailers should share the market demand information they know with their manufacturers when the manufacturers do not know the same specific demand information. We also determine the optimal pricing policy and total profit for the retailers when each chain either shares or does not share market demand information. We find that sharing information is always more profitable for both retailer and supply chain.

scholarly journals Pricing Decisions on Online Channel Entry for Complementary Products in a Dominant Retailer Supply Chain

2020 ◽  
Vol 12 (12) ◽  
pp. 5007 ◽  
Author(s):  
Qiongqiong Gu ◽  
Xiaodong Yang ◽  
Bin Liu
Keyword(s):  
Supply Chain ◽  
Power Structure ◽  
The Other ◽  
Complementary Products ◽  
Pricing Decisions ◽  
Online Channel ◽  
Stackelberg Model ◽  
Dominant Retailer ◽  
Marketing Actions ◽  
Offline Channels

This study considered the supply chain that two manufacturers sell green complementary products to a dominant offline retailer. We investigated whether a manufacturer (the integrated manufacturer) should add an online channel and examined how it affects channel members’ decisions and profits. We formulated the power structure as the retailer-Stackelberg model and analyzed the pricing decisions for the supply chain. The results demonstrate that the integrated manufacturer prefers not to add the online channel when online and offline market bases are comparable and the level of complementarity is moderate. The integrated manufacturer gains more power at the expense of the offline retailer and the other manufacturer (the traditional manufacturer) when the complementarity between the offline and online channel is the same as offline channels with the addition of a new online channel; furthermore, the retailer earns less, while the traditional manufacturer’s profit hinges on the complementarity between the online and offline channels. It is beneficial for the offline retailer to balance the online and offline market bases of product 1 by improving the sales environment of the physical store. The integrated manufacturer can benefit from varying their marketing actions to decrease the degree of complementarity between the retail and online channels for the two products, while the traditional manufacturer can be better off from the online channel introduction by taking steps to increase the complementarity of the two products between the offline channels.

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