| In this dissertation, we study the optimal policies for manufacturers under consideration of the strategic actions of their upstream suppliers and downstream retailers using a game theoretic approach. In the first essay, we study optimal distribution channel strategies for competing manufacturers that participate in markets for complementary products. Our results suggest that a firm with a competitive advantage might benefit from selling through company-controlled stores, allowing coordinated pricing across the two markets, while a less competitive firm might be better off using independent channel intermediaries to mitigate price competition. In the second essay, we study how a supplier's subcontracting incentive affects the manufacturer and product quality. We consider a manufacturer who outsources two tasks to a tier-1 supplier, who might complete the tasks in-house or subcontract to a lower-tier supplier. We find that if the tier-1 supplier is relatively more cost efficient, the manufacturer might be better off granting the tier-1 supplier a lower revenue share, thus encouraging the tier-1 supplier to perform both tasks in-house. In the third essay, we investigate a manufacturer's make-buy decision when facing multiple suppliers with unknown capabilities. The manufacturer might audit the suppliers to gain information regarding their capabilities. We find that once a manufacturer finds it optimal to audit a supplier, it should continue auditing until encountering a capable supplier or until at most one supplier is not audited. |
