Study On Supply Chain Performance Under Different Power Structures Based On Strategic Customer Behavior

The dominant position of the retailers keeps continuously emerging in terms of scale, information access and closeness to the consumer market, the growing change of market environment and high-speed development of information technology promote a great transformation of the economic power related to supply chain, so dominant countervailing power of the market transfers from manufacturers to retailers. Market power transfers to the downstream resulting in three kinds of supply chain structures, which are manufacturer-dominated structure, power equivalent structure and retailer-dominated structure. However, frequent discount promotions get the customers trained to become more and more rational and strategic, which increases the countervailing power of the retailers that face directly towards the customers and increases the conflict of interests and resources between the retailers and the manufacturers. Moreover, it is difficult for the enterprises in supply chain to achieve Pareto equilibrium, which makes it urgent for them to bring new response decisions to maximize the enterprise benefits.This study is conducted based on the dynamical process that the countervailing power held from manufacturer to retailer under the consideration of the existence of strategic customer behavior.This study compares the game equilibrium of the different power structures in order to analyze the influence of the behavior to customers strategic waiting on the optimal decision of the supply chain enterprises and supply chain coordination. This paper concludes that if the supply chain enterprises can face the existence of strategic customers and make reasonable decisions, it can achieve a win-win situation. The supply chain performance of different power structures depends on the degree of strategic customer behavior, when the strategic customer behavior is within the critical level, the retailer-dominated supply chain will take advantages. Otherwise, the manufacturer-dominated supply chain will. Only when the behaviors of strategic customers become serious enough to exceed the critical value, the high proportion of strategic customers will deteriorate the profits of retailer dominated supply chain. Strategic customers prefer the retailer-dominated market structure, which is because the low selling price of the retailer-dominated supply chain makes the customers have great benefits of the low price. The conclusions drew by this paper provide theoretical and methodological guidance for the industries where strategic customers exist.