Supplier Encroachment And Retailer Anti-encroachment Based On Asymmetric Information

Nowadays,facing the increasing needs to integrate online and offline resources,a growing number of suppliers choose to encroach,i.e.,to open the direct selling channels in addition to the preexisting retail channels,with the goal of providing consumers with a seamless shopping experience through all available shopping channels.On one hand,the rapid development of e-commerce and third-party logistics has attracted suppliers to encroach on the traditional retail market through direct online channels.On the other hand,a couple of suppliers who have traditionally sold products through e-tailers in online channels,have opened brick-and-mortar retail shops.Such a direct channel opened by the supplier may generate channel competition and serve as a threat and challenge to the retailer’s monopoly authority.For the retailer,it is necessary to adopt some effective measures to deal with supplier encroachment.This thesis studies two antiencroachment strategies for the retailer: retail service investing and demand information sharing.Based on asymmetric information,this thesis comprehensively analyzes the strategy interaction of supplier encroachment and retailer anti-encroachment.The detailed contents are summarized as follows:First,this dissertation investigates the interaction between the retailer’s retail service investing strategy and the supplier’s online encroachment strategy.Develop multistage game models in a retailer-led supply chain consisting of one supplier and one retailer under both full and incomplete direct selling cost information framework.Examine the impacts of supplier encroachment,retail service investing,and information on both the supply chain and consumer surplus.Solve the game by backward induction.Results show that the retail service level is reduced by encroachment.The retail service investing may actually be an effective anti-encroachment measure for the dominant retailer especially when the retail service investing is highly efficient and the retailer holds a great downward estimation deviation about the direct selling cost of the manufacturer.Retail service investing may lead to a “win-win” outcome for the supply chain members and consumers.The supplier may have incentives to share cost information with the retailer,depending on the retailer’s estimation deviation on the direct selling cost.A prisoner’s dilemma may occur for a moderate fixed cost of encroachment.Next,this dissertation investigates the interaction between the retailer’s demand forecast sharing strategy and the supplier’s online encroachment strategy.By incorporating the supplier’s endogenous quality decisions,develop a multi-stage game model in a retailer-led supply chain consisting of one supplier and one retailer.Examine the impacts of supplier encroachment and demand forecast sharing on the quality decision,and profits of chain members.If the retailer does not share the demand forecast,the supplier can infer the forecast from the retailer’s retail margin decision,which leads to a signaling game.Solve the game by backward induction.Results show that when consumers’ level of acceptance of online buying is low,the retailer is willing to share the demand information and the supplier chooses not to encroach.When consumers’ level of acceptance of online buying is high,the launch of the supplier’s online channel can result in costly signaling behavior for the retailer,where the retailer must increase the retail margin to signal the true demand forecast,which may hurt both chain members.Consequently,the retailer prefers to keep the information private to prevent the supplier’s intention to establish a direct channel if the demand forecast information is moderately accurate and the direct selling cost of the supplier is great,and shares information to encourage the supplier to encroach otherwise.Finally,this dissertation investigates the interaction between the e-tailer’s demand information sharing strategy and the supplier’s offline entry strategy under both agency selling and reselling agreements.Develop a multi-stage game model in a supply chain consisting of one supplier and one e-tailer.Examine the impacts of supplier offline entry,e-tailer demand information sharing,agency selling or reselling on profits of chain members.Analyze the e-tailer’s preference on agency selling and reselling.Solve the game by backward induction.The equilibrium results are quite different under these two agreements.Specifically,when the supplier’s offline entry cost is very small or large,the e-tailer shares information under agency selling while keeps information private under reselling.When the entry cost is intermediate,channel substitution rate is large and information uncertainty is small,the e-tailer withholds the demand information under agency selling while shares information under reselling to deter the supplier from entering an offline channel.Furthermore,with consumer showrooming,withholding information under agency selling and sharing information under reselling may also serve as measures to encourage supplier offline entry when the effect of showrooming is strong.