Research On Supplier Market Encroachment Strategy Considering Product Traceability

Nowadays suppliers can improve product traceability and encroach on market to enhance the competitiveness.This paper analyzes the supplier’s traceability investment,market encroachment strategy,and the impact on downstream retailers from the perspectives of different decision sequences,competitive environment,and uncertain demand.The main conclusions are as follows:(1)In a two-echelon supply chain composed of a supplier and a retailer,the supplier’s market encroachment strategy is affected by the direct sales cost and traceability cost.As traceability costs increase,the possibility of market encroachment decreases.Under sequential decision,the possibility of market encroachment and the profits of both parties are greater than that under simultaneous decision.When the direct sales cost is at a medium level encroachment can weaken the double marginal effect and increase the retailer’s revenue.(2)When there are multiple retailers in the distribution channel,the number of retailers plays an important role in determining supplier traceability investment,market encroachment strategies.There exists a threshold,when the number of retailers is lower than this value,supplier’s encroachment can achieve Pareto improvement;when the number of retailers is higher than the value,it is harmful for retailers.With the improvement of traceability investment efficiency,the possibility that retailers benefit from supplier’s encroachment strategy increases.(3)When market demand is uncertain and retailer can predict demand,the supplier’s encroachment strategy is affected by the retailer’s information sharing strategy,while the retailer’s information sharing strategy depends on the traceability cost and the degree of competition between channels.When the direct sales cost is small(larger),regardless of whether the retailer shares the demand information,the supplier will choose to enter(not enter)the market;when the direct sales cost is at an intermediate level,the retailer’s sharing information will motivate supplier to encroach on the market.As the accuracy of demand forecasting improves,the possibility of sharing information decreases first and then increases.