Channel Strategy Of Supply Chain With Price And Delivery Lead Time Consideration

Internet has set up a new trading platform between enterprises and consumers, and plays an important role in transforming and upgrading virtual network business and traditional economy entities. With the push of economics, pull of consumption and inventive of profits, manufacturers are considering to redesign their distribution channels to achieve efficient operation. The introduction of online channel, however, will bring channel competition and channel conflict, in addition, distinctions in market environment, products, and operation of enterprise also affect manufacturers’channel selection and marketing strategies.This thesis, based on consumer channel choice, constructs a pricing and delivery lead time setting game between one manufacturer and one retailer, and analyzes the equilibrium channel strategies in various channel environments described by factors such as the cost, customer acceptance of direct channel. We show that the choice of channel structure depends on customer acceptance of direct channel and cost parameters, following a threshold policy in both forms of ownership; A vertical manufacturer will rationally allocate demand between two channels according to consumers channel preference and profit margin; In the decentralized supply chain, direct channel as a strategic tool to constrain retailer’s pricing behavior can relieve double marginalization and there is a Pareto Zone where both manufacturer and retailer outperform their counterparts in the traditional indirect channel-only case; the delivery lead time relates to not only time parameters, but also supply chain mode; Manufacturer chooses to delay delivery lead time and cut direct channel price when customers are more sensitive to delivery lead time.