Retailer voluntary investment against a threat of manufacturer encroachment

Hamamura, Jumpei; Zennyo, Yusuke

doi:10.1007/s11002-021-09575-7

Cited by 20 publications

(19 citation statements)

References 24 publications

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“…In contrast to mode R and Hamamura and Zennyo (2021), in our setting, we observe that an increase in production cost will lead to an increase in the investment level. The supplier's and the platform's profit are, respectively, given by ] .…”

Section: Mode Dcontrasting

confidence: 60%

Reselling or dual selling? The role of consumer‐to‐manufacturer e‐commerce platforms' voluntary investment

Zhao,

Hou,

Chen

2024

Naval Research Logistics

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Recent years have witnessed e‐commerce platforms that voluntarily invest in new digital technologies to help their suppliers reduce production costs. To examine its impact on channel structure, we develop a supply chain model consisting of a supplier and an e‐commerce platform who purchases products from the supplier at a wholesale price and sells them to end markets. In addition, the supplier has the option to accept the marketplace by paying a commission fee charged by the platform. We show that the presence of voluntary investment on production improvement can overturn some classical insights from prior studies. For example, a higher marketplace commission fee can lead to a lower selling quantity in the marketplace, but a higher order quantity in the reselling channel under certain conditions. This stands in strict contrast to the opposite finding when the platform invests instead on demand enhancement. In addition, previous studies suggest that offering the supplier the marketplace option is beneficial to the supplier but is detrimental to the platform. However, with voluntary investment, the platform can benefit from allowing the supplier to encroach via the marketplace, and in some situations the supplier suffers from having such an option. We find that the commission fee and the production cost are two interacting forces steering equilibrium decisions for supply chain members, and we characterize the concise operating regimes for the channel structure choices on behalves of the supplier and the platform. A number of extensions are discussed, including product substitution level, investment cost structure, whether the quantity decisions are made simultaneously or sequentially, voluntary investment timing, and endogenous commission fee.

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Section: Mode Dcontrasting

confidence: 60%

Reselling or dual selling? The role of consumer‐to‐manufacturer e‐commerce platforms' voluntary investment

Zhao,

Hou,

Chen

2024

Naval Research Logistics

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“…He et al (2022) explored the impact between manufacturer encroachment and platform logistics integration based on e-commerce service platform supply chain and found that under certain conditions platform logistics integration strategy can effectively inhibit manufacturer encroachment. In contrast, Hamamura and Zennyo (2021) treat spontaneous cost-reduction investments by retailers as a tool to deter encroachment by manufacturers and to create a strategic deterrent.…”

Section: Literature Reviewmentioning

confidence: 99%

“…He et al (2022) explored the impact between manufacturer encroachment and platform logistics integration based on e‐commerce service platform supply chain and found that under certain conditions platform logistics integration strategy can effectively inhibit manufacturer encroachment. In contrast, Hamamura and Zennyo (2021) treat spontaneous cost‐reduction investments by retailers as a tool to deter encroachment by manufacturers and to create a strategic deterrent. Although the above literature has examined manufacturer invasion behavior from different perspectives, including brand effect, green investment, advertising and marketing, and information sharing, in addition, a small amount of literature has also focused on strategies related to inhibiting manufacturer's encroachment behavior.…”

Section: Literature Reviewmentioning

confidence: 99%

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

Liu

et al. 2023

Manage Decis Econ

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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.

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“…, 2018), investment (Arya and Mittendorf, 2013; Yoon, 2016; Zhang et al. , 2019b; Hamamura and Zennyo, 2021; Chen et al. , 2021), competition (Li et al.…”

Section: Literature Reviewmentioning

confidence: 99%

“…Such win-win outcomes have also been obtained in different circumstances. Related literature has considered other non-price features in encroachment, such as channel coordination (Tsay and Agrawal, 2004;Boyaci, 2005;Cai, 2010;Kremez et al, 2021), durability (Xiong et al, 2012;Yan et al, 2018), fairness (Li et al, 2016), advertisement (Zhang et al, 2020), inventory (Guan et al, 2019;Li and Jiang, 2019), quality (Ha et al, 2016;Chen et al, 2017;Zhang et al, 2019a), limited capacity (Yang et al, 2018), investment (Arya and Mittendorf, 2013; Encroachment in a threeechelon supply chain Yoon, 2016;Zhang et al, 2019b;Hamamura and Zennyo, 2021;Chen et al, 2021), competition (Li et al, 2015a;Balasubramanian and Maruthasalam, 2021;Zhang et al, 2021b) and asymmetric information (Li et al, 2014(Li et al, , 2015c(Li et al, , 2017Matsui, 2016;Huang et al, 2017;Sun et al, 2021). Specifically, encroachment may not lead to win-win outcomes if one of the players has relatively limited information.…”

Section: Literature Reviewmentioning

confidence: 99%

Encroachment in a three-echelon supply chain: manufacturer encroachment or distributor encroachment

Liang

Zheng

2022

APJML

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PurposeThe purpose of this paper is to investigate manufacturer encroachment and distributor encroachment in a three-echelon supply chain consisting of an upside manufacturer, an intermediate distributor and a downside retailer.Design/methodology/approachIn this paper, the authors use the optimization theory to mathematize the proposed question and build a model. First, the authors consider sequential quantity decisions, where the encroacher decides on the direct selling quantity after determining the retailer's order quantity. Second, the authors relax this sequential decision process assumption by reconsidering a circumstance in which quantity decisions are decided simultaneously.FindingsIn contrast to previous studies, this study shows that in three-echelon supply chains, the upside firm is more likely to encroach compared with the downside firm. The “bright side” of encroachment exists for all players only when the encroachment cost is at a moderate level. However, in manufacturer encroachment under simultaneous quantity decisions, the “bright side” skips the distributor but benefits the retailer directly as the encroachment cost increases from zero to a certain level. The main reason lies in that the distributor loses its pricing power because the end-market has been disturbed by the simultaneous quantity decisions. A comparison of the results of sequential and simultaneous quantity decisions reveals the merit of simultaneous quantity decisions. The authors find that the intermediate role (the distributor in our model) in three-echelon supply chains may benefit more from simultaneous quantity decisions. That is, the distributor may achieve a better profit even in a market with intensified competition.Originality/valueThe findings of this paper contribute to the marketing science literature on encroachment. The majority of existing literature has focused on manufacturer encroachment in two-echelon supply chains. This paper innovatively investigates and compares manufacturer encroachment and distributor encroachment in a three-echelon supply chain.

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Retailer voluntary investment against a threat of manufacturer encroachment

Cited by 20 publications

References 24 publications

Reselling or dual selling? The role of consumer‐to‐manufacturer e‐commerce platforms' voluntary investment

Reselling or dual selling? The role of consumer‐to‐manufacturer e‐commerce platforms' voluntary investment

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

Encroachment in a three-echelon supply chain: manufacturer encroachment or distributor encroachment

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