Supply Chain System Of The Internet-based Multi-channel Competition

Internet channel not only makes purchasing easier, but also acts as an important factor which affects the competition outcome among firms. Internet channel is also characteristic of Electronic Commerce. With high development of Internet technology and wide spread of electronic commerce application, channels between firms and customers diversitify greatly. Channel diversification has become a challenge for companies how to effectively manage these channels. In order to keep up with the competition trend even gain a competitive advantage, how to design and manage channel mix is a key for a company to success.The research is done under the background abovementioned, Hotelling model (Salop model) and Game theory are used to discuss competitively pricing problem for multi-channels including Internet channel. Firstly, the thesis considers the procurement game between a traditional retailer and a pure Internet retailer, Nash equilibrium competition and Stackelberg equilibrium competition are analyzed respectively. Secondly, the problem about manufactures and retailers how to utilize Internet channel is considered. For retailers, the condition for incumbent retailer to introduce Internet online channel and how incumbent retailer's multiple channels management style (joint operation management and independent operation management) affects incumbent retailer's decision about online channel introduction are analyzed when incumbent retailer faces E-tailer's entry. For manufactures, under the condition that trying to avoid channel conflict, three kinds of equal-pricing strategy (keeping wholesale price same strategy, keeping retail price same strategy and maximizing manufacturer's profit strategy) are considered to analyze whole supply chain's profit, manufacturer's profit and retailer's profit respectively. The result shows that the strategy which optimizes the manufacture's profit (Strategy 3) also tends to be preferred by the retailer over the other two strategies. The end customer prefers Strategy 3 in most cases too. Then, relaxing the constraint for keeping retail price equal, the profit for manufacturer and retailer, retail price and optimal wholesale price are ananlyzed under Betrand competion and Stackelberg competion between manufacturer and retailer respectively. When a manufacturer introduces on-line channel and a retailer also has option to expand its stores, research conclusion shows that there are conditions under which a retailer strategically stays localized in order to deter a manufacturer from entering the direct market. The manufacturer's direct channel entry always hurts the retailer's profitability. Whereas the manufacturer generally benefits from setting up a direct channel, there exist scenarios under which the manufacturer is strictly worse off with an online store even when its entry cost is negligible. In contrast, both the manufacturer and the retailer are better off with expanded retail stores. Finally, apart from price factor, some non-price elements such as service quality and customers' recognition difference for service quality are also included in the model which consides the dual channel supply chain. The numerical results show that an increase in retailer's service quality may actually increase the manufacturer's profit in dual channel. Moreover, a higher degree of heterogeneity in consumer sensitivity may improve both parties' profits at the equilibrium. The difference in marginal costs of the two channels is a major factor determining the existence of dual channel supply chains. We also show that even if the manufacturer sets the wholesale price, the outcome may still be dual channel equilibrium. In addition, the manufacturer is likely to be better off in the dual channel than in the single channel when the retailer's marginal cost of selling is high and the wholesales price, the consumer valuation and the demand variability are low.