Research On The Pricing Decision And Coordination In Dual-channel Supply Chain With Dominant Power

With the rapid development of Internet and convenience in shopping online,Online Shopping has been one of the most important ways we shop.More and more enterprises,including manufactures and retailers,choose to introduce direct channel to gain more market share and become more competitive with the implementation of manufacture dual-channel strategy and retailer dual-channel strategy.However,establishing the direct channel will face many conditions.On the one hand,different channels sell the same products,they will inevitably compete for market share,which leads to channel conflicts.On the other hand,the implementation of these two dual-channel strategies leads to worse channel conflicts,which will result in the effect of Double Marginalization and vertical conflict in the supply chain,and thus decrease total revenue.Based on the theory and relevant researches of dual-channel supply chain,this paper does research on dual-channel supply chain consisting of a manufacture and a retailer,using the Stackelberg game theory,Math modeling and optimization theory,to study the pricing decision and coordination of the manufacturer-lead dual-channel supply chain and the retailer-lead dual-channel supply chain.Through the whole paper,the results show that:(1)Both in the manufacturer-leader dual-channel supply chain and the retailer-lead dual-channel supply chain,the decentralized decision-making under the Stackelberg game theory causes Double Marginalization Effect and the profits of the supply chain system are fewer than the case of centralized decision-making.(2)Dual-channel supply chain,which is in the case of the manufacturer-leader or the retailer-leader,can achieve perfect coordination and obtain higher efficiency through contract models.However,only if the parameters are in a proper range can manufacture and retailer accept the coordination contract,the profits of all the members are more than the case of decentralization,it can eventually make Pareto improvement and coordination of supply chain come true.(3)Dual-channel supply chain,which is under different channel dominant powers,can both achieve perfect coordination and obtain higher efficiency through Revenue Sharing Contract models.However,the two improved revenue sharing contract parameters need to meet certain requirements in order to improve the profit of the manufacturer and the retailer's profit at the same time and the feasibility of the two models have been verified by MATLAB numerical examples.(4)From the perspective of members of supply chain,the one who owns channel dominant power will make a decision,which is beneficial to himself,and thus obtain maximum profit.So manufactures and retailers should try to seize channel dominant power.From the perspective of whole supply chain,different channel dominant powers have no effect on total profits.