Research On Feasibility And Competition Strategy Analysis Of Bricks And Clicks

With the continuous mature and development of computer and Internettechnology, network had integrated into the daily life and work, e-commerce began tomature. In order to obtain a larger market and more profits, more and more traditionalretailers began to develop the network channel with the continuous improvement ofthe e-commerce market. However, traditional retailers who open online channel alsoface a lot of problems. Firstly, there is the price competition between the networkchannels and traditional channels, because these two channels have different inboundchannels and price. Secondly, it is the problem of demand shift. Even though thenetwork channels can extend the potential market demand, the price of networkchannels is lower than the traditional channels generally so that it will lead to thedemand shift of the traditional channels.First of all, considering linear relationship between demands with advertisinginputting and price, we compared the profit change of retailers and manufacturer aswell as the supply chain profit under centralized decision between the traditionalsingle channel and Bricks and Clicks. At the same time, using numerical example tosimulate the model, we obtain that Bricks and Clicks is profitable to the retailerswhen the rate of channel shift and demand extend meet certain condition.Secondly, after the retailers developing the online channel, the online channelfaces the competition from pure e-commerce retailers. In this paper, on the basis ofpredecessors’ researching, we build the utility model of dual-channel and puree-commerce retailers at the perspective of consumer utility. At the same time, weobtain the optimal price of the retailer under different conditions through optimizationtheory. In conclusion:firstly, with the acceptance degree’s improvement of onlinechannel in Bricks and Clicks retailer, the pricing of online channel can occupy theinitiative; secondly, when the cost of pure e-commerce retailers and the cost ofcustomers purchasing meet certain condition, Nash equilibrium between Bricks andClicks and pure e-commerce retailer exit.