Research On The Vendor Selection Strategy Of Retailer's Private Label

Private label is corresponding with national label.Introducing and developing private label is an effective strategy for the retailer to deal with traditional competition and electric shock.According to the product positioning,retailer's private label could be divided into generics,copycat,premium store brands and value innovators.When retailers intend to introduce their own private label,they generally outsource production from national manufacturer or fringe manufacturer.So which manufacturer should retailer choose to obtain more profit?To solve this problem,Stackelberg game theory and optimization theory are utilized to this paper.Using mathematical modeling and data simulation,we analyze the private label retailer's vendor selection strategy under monopoly case and competition case.This paper includes two selections.Under monopoly case,we first build the supply chain model of N mode(retailer chooses national manufacturer)and F mode(retailer chooses fringe manufacturer).Then we study and compare the retailer's optimal price and profit under F mode and N mode.The result shows:when national manufacturer's cost advantage is obvious and the product substitutability is very low,the retailer should choose national manufacturer.And in other scenarios,it should choose fringe manufacturer.Under competition case,we investigate two symmetrical and competitive retailers'vendor selection decision and Nash equilibrium strategy.Firstly,we build the supply chain model of FF mode,NN mode and NF mode.We then study and compare retailers'optimal order quantity and profit under these three scenarios.On this basis,we analyze retailers' Nash equilibrium strategy.The result shows:When the wholesale price becomes higher,the retailer may increase the product's order quantity.Affected by the competition between product and retailer,the retailer doesn't always select the manufacturer of low purchase cost.And retailers' Nash equilibrium strategy is as following:When national manufacturer's cost advantage is obvious and the product substitutability is low,the equilibrium is(N,N).When the national manufacturer's cost advantage isn't obvious and the product substitutability is low,the equilibrium is(F,F).And in other scenarios,the equilibrium is(N,F)or(F,N).