A Study On Retailer's Horizontal Merger Decision-making In A Dual-channel Supply Chain

The sustainable industry consolidation brought by the gradual mature economy of China becomes a main driving force in the corporate merger.The merger incidents occur frequently in retail industry,and become a heated issue.In the meanwhile,the Co-existence of traditional channel and electronic channel becomes a normal state in the market construction of supply chain,thus the conflicts in cross-channel turn into a management problem.Manufacturers and retailers can relieve the cross-channel conflicts by means of channel differentiation,while a false decision may cause a new contradiction even enlarge the cross-channel conflicts.This thesis tries to set up three different models of retailer's horizontal merger in a dual-channel supply chain,this thesis discuss merger effects and influential factors,and also further analyze the decision of merger.The main research conclusions are as follows:Under the circumstance of the electronic channel of dual-channel supply chain built by manufacturer,our conclusions reflect:firstly,if a bigger profit is pursued after merger,the threshold of cost synergy from lower to higher level is:traditional retailers,social welfare,manufacturer and consumer surplus.Secondly,when the cost synergy reaches a certain positive threshold,the merger will help to ease the channel conflict and benefit all parties.Thirdly,the differentiation degree between traditional channel and electronic channel do not have a relation with the profit which traditional retailers,manufacturer,consumer surplus and the social welfare make from a merger.And the increase of the differentiation degree between traditional channels and the electronic channel market share will be beneficial for the manufacturer,consumer surplus and social welfare to make a profit in the merger.While a contrary situation will benefit the traditional retailers.As far as the electronic channel of dual-channel supply chain built by electronic business retailer are concerned,our conclusions show:firstly,if a bigger profit is pursued after merger,the threshold of cost synergy from lower to higher level is:electronic business retailer,traditional retailers,social welfare,manufacturer and consumer surplus.Secondly,in a certain range of positive threshold of cost synergy,the merger will help to ease the channel conflict and benefit electronic business retailer,traditional retailers,social welfare and manufacturer,exceeding this threshold of cost synergy will benefit consumer surplus and result in the electronic business retailer loss.Thirdly,the boost of the differentiation degree between traditional channels,of the differentiation degree between traditional channel and electronic channel and the increase of electronic channel market share will be beneficial for the manufacturer,consumer surplus and social welfare to make a profit in the merger.While a contrary situation will benefit the traditional retailers and the electronic business retailer.Fourthly,the changes of the differentiation degree between traditional channels have a greater impact on merger effect than the changes of the differentiation degree between traditional channel and electronic channel.In view of the existence of the electronic channel of dual-channel supply chain built by multi-channel retailers,the findings are as follows.Firstly,if a bigger profit is pursued after merger,the threshold of cost synergy from lower to higher level is:multi-channel retailers,social welfare,manufacturer and consumer surplus.Only by attaining a higher level of cost synergy can benefit all parties.Secondly,the increase of the cost synergy will help multi-channel retailers,manufacturer,consumer surplus and the social welfare benefit from merger,but will not help the multi-channel retailers and the manufacturer benefit from the electronic channel.Thirdly,the increase of the differentiation degree between traditional channels(electronic channels)and the differentiation degree between traditional channel and electronic channel will be beneficial for the manufacturer,consumer surplus and social welfare to make a profit in the merger.While a contrary situation will benefit the multi-channel retailers.Fourthly,the increase of the electronic channel market share will benefit multi-channel retailers when the electronic channel's market share is smaller than the traditional channel's market share,but will not help the consumer surplus and the social welfare benefit from the merger,and it do not have a relation with whether the manufacturer benefit from the merger.Finally,with the comparison of the effects of retailer's horizontal merger and the influential factors in a dual-channel supply chain under three different models,this paper not only offers theoretical guidance for management decision-making of upstream and downstream firms when retailer 's horizontal merger in a dual-channel supply chain,but also provides decision support to mitigate the cross-channel conflict.