The Study Of Retailer Innovation's Mechanism Under The Condition Of Countervailing Power

With the aggravation of the retail market competition,the "low profit era" of the retail industry has arrived.To get and maintain the core competitive advantage in this context,retailers should improve their market position,and innovation is an important way.Real economic case of retailer innovation is also very common,but through careful analysis we can find that there is a big difference between different retailers,the innovation level of large foreign retailers is higher than local retailers.So what factors affect the innovation among retailers?How can retailers improve their innovation ability?This paper answers these questions from the perspective of the countervailing power.There are many factors that influence retailers' innovation,such as,the retailer's own factors and the market environment factors,the buyer countervailing power is a kind of market environment factors,and influence the retailer's innovation naturally.This paper takes process innovation and service innovation as examples,and researches the impact of buyer countervailing power on these two forms of innovation.Concretely,this paper constructs a vertical market structure model,which consists of the monopolistic suppliers,chain retailers and local retailers,and investigates the retailers' process innovation and service inno'vation decisions under the conditions of the countervailing power.By comparing the retailer innovation level in two cases,retailer have buyer countervailing power or not,it obtained the effect of buyer countervailing power of retailer on process innovation and service innovation.The findings are as follows.(1)In the case of the process innovation,the change of chain retailer's buyer countervailing power will affect both chain retailer and local retailer.The impact of buyer countervailing power on the chain retailer's process innovation is related to the degree of competition among retailers.When the degree of competition among the retailers is small,the enhancement of buyer countervailing power will promote the process innovation of-V-chain retailers.When the degree of competition among the retailers is large,there is a critical value of buyer countervailing power.When the buyer countervailing power is less than the critical value,chain retailer's process innovation will increase with the enhancement of buyer countervailing power;when the buyer countervailing power is greater than the critical value,chain retailer's process innovation will reduce with the enhancement of buyer countervailing power.However,the effect of buyer countervailing power on local retailer 's innovation process has nothing to do with the degree of competition among the retailers.Local retailer's process innovation will firstly decrease and then increase with the enhancement of buyer countervailing power.(2)In the case of the service innovation,the buyer countervailing power will affect both chain retailer and local retailer,but the effect has nothing to do with the degree of the degree of retailer competition.Concretely,as the enhancement of countervailing power,chain retailer's service innovation will increase,but the service innovation level of local retailer will decreases firstly and then increases.(3)The paper analyzes the mechanism of the retailers' process innovation and service innovation under the condition of the buyer countervailing power,and finds that in the process innovation,the factors that affect innovation are scale effect,competition effect and cost effect,and the buy countervailing power will influence process innovation through the scale effect and competition scale.However,in the service innovation,the factors that affect innovation are output effect,competition effect and cost effect,and the buyer countervailing power will influence service innovation through output effect and competition scale.(4)Under the background of retailer innovation,this paper also examines the effects of the buyer countervailing power on consumer surplus and corporate profits,and finds that consumer surplus and retailer's profit will increase,but the profits of supplier reduces as the enhancement of buyer countervailing power.The validity of the conclusion is verified by numerical examples and the robustness of the conclusion is also investigated.Finally,according to the conclusion,the paper puts forward policy suggestion for promoting local retailer's innovation.