Online channel configuration strategy considering contract manufacturer encroachment and green investment

This paper considers an outsourced supply chain comprising a contract manufacturer (CM), an original equipment manufacturer (OEM) and an online platform. In addition to providing contract manufacturing services to the OEM, the CM enters the market using the customer‐to‐manufacturer (C2M) strategy. Two baseline models and four encroachment models with different selling modes are modeled to explore the interaction among CM encroachment, selling modes and the C2M strategy. We find that the CM will always encroach if brand substitution is sufficiently high. However, the CM will still encroach despite brand substitution being low if the platform charges the OEM a high commission rate in Scenario PR. The results also show that the CM may increase or decrease the wholesale price charged to the OEM according to his dependence on the OEM channel and direct channel. Finally, we find that after CM encroachment, the OEM is worse off, while the platform may be better or worse off. The profits of the CM, OEM, and platform decrease if customers are more concerned about production flexibility. Our work provides guidance for CM encroachment from the perspective of channel choice and product strategy and offers managerial insights into C2M practice.

Section: Literature Reviewmentioning

confidence: 99%

Section: Literature Reviewmentioning

confidence: 99%

Contract manufacturer encroachment via the customer‐to‐manufacturer strategy under different platform selling modes

Qiu,

Ren,

Zhao

2024

“…Channel introduction in this paper refers to when manufacturers enter the retail market by establishing new channels (Arya et al, 2007;Ha et al, 2016;Huang et al, 2018;Li et al, 2014Li et al, , 2022.…”

Section: Literature Reviewmentioning

confidence: 99%

For showing only, for selling only, or for hybrid? Physical store deployment for a manufacturer in online retailing

Li,

Zhang,

et al. 2024

Self Cite

Manufacturers in online retailing are exploring a physical store option: showroom, retail store, or hybrid model. We've built game‐theoretic models to study their deployment strategies and channel preferences of e‐tailers and consumers. Our analysis reveals that manufacturers opt for a hybrid store with a small showrooming effect, showroom with a significant effect, but rarely a retail store. Consumers generally favor manufacturers introducing an offline channel while e‐tailers prefer this when the online channel has a large market share. When the online channel dominates, e‐tailers are more motivated to choose a hybrid store while consumers lean towards a showroom.

“…The most relevant is product traceability and traceability preferences in supply chain management. Traceability refers to the ability to track and trace information (Cao et al, 2020; Li, Gong, et al, 2022; Li, Zhang, et al, 2022; Sunny et al, 2020; Uddin et al, 2021).…”

Section: Literature Reviewmentioning

confidence: 99%

“…There are differences in the focus of research on manufacturer invasion, with some studies focusing on commodity brand effects, for example, manufacturer encroachment strategies under retailer store brands and national brands (Balasubramanian & Maruthasalam, 2021; Nie et al, 2021; Zhang, Liu, et al, 2021; Zhang, Song, et al, 2021) and private brand encroachment strategies (Li, Cai, & Chen, 2021; Li, Hu, et al, 2021; Li, Liang, et al, 2021). Manufacturer encroachment under advertising and marketing strategies (Huang et al, 2021; Ma & Hong, 2021; Zhang et al, 2019), green products and green investments (Li, Cai, & Chen, 2021; Li, Gong, et al, 2022; Li, Hu, et al, 2021; Li, Zhang, et al, 2022), manufacturer encroachment under information sharing (Huang, Chen, & Guan, 2020; Guo et al, 2023; Huang, Chen, & Xiao, 2020; Hu, Huang, et al, 2021; Hu, Sun, et al, 2021), and also some studies focus on manufacturer encroachment under information asymmetry (Gao et al, 2021; Xu & Xu, 2022). Also, Zhang et al (2022) explored the effect of supply chain channel structure on manufacturer encroachment decisions in a capital‐constrained or well‐capitalized state for retailers and found that the choice of trade credit financing by capital‐constrained retailers inhibits manufacturer encroachment.…”

Section: Literature Reviewmentioning

confidence: 99%

Manufacturer encroachment strategies and decision timing considering the product traceability preferences under e‐commerce

Liu

et al. 2023

Blockchain technology is applied for product traceability in e‐commerce supply chains. In this context, the paper investigates the channel problem and decision timing problem considering product traceability. Using game‐theoretic framework, the manufacturer encroachment strategies, order quantities and profits under different channel structure, and traceability level are characterized. Research shows that selling traceability products can expand potential market demand and increase the sales volume of products and the profits of manufacturers and retailers. Under encroachment, members with information advantage can maximize their own profits. Additionally, manufacturers can regain the high ground by adjusting traceability levels to influence wholesale prices.