Volume 56, Number 5, September-October 2022
|Page(s)||3341 - 3365|
|Published online||14 September 2022|
Suppliers’ online channel structure strategies under product innovation effect and spillover effect
College of Mathematics and Statistics, Huanggang Normal University, Hubei 438000, P.R. China
2 School of Economics and Management, Tianjin Polytechnic University, Tianjin 300387, P.R. China
3 School of Management, Chongqing Technology and Business University, Chongqing 400067, P.R. China
4 School of Statistics, Xi’an University of Finance and Economics, Xi’an 710100, P.R. China
* Corresponding author: firstname.lastname@example.org
Accepted: 23 August 2022
In this paper, we investigate how spillovers from online sales to offline sales and product innovation jointly affect suppliers’ optimal online channel structure strategies. By comparing equilibrium outcomes of the game between a supplier, an offline retailer and an online retailer in different scenarios, including the scenario without product innovation, the scenario with exogenous product innovation and the scenario with endogenous product innovation, we obtain some novel management implications. There exists a threshold curve such that when the supplier’s marginal operating cost is below the threshold curve, the supplier is better off establishing a direct online channel, otherwise, the supplier should introduce an independent online channel. Nonetheless, the threshold curve is not a monotonic function of the spillover coefficient, but a function that decreases first and then increases with the the spillover coefficient. Exogenous product innovation does not change the supplier’s optimal online channel structure strategy qualitatively, it leads to some quantitative changes, shifting the threshold curve upward. However, endogenous product innovation changes the position and shape of the threshold curve significantly and gives the supplier the flexibility to establish the direct online channel. This paper reveals an underlying trade-off between online channel operational efficiency and channel coordination, providing suppliers managerial suggestions on online channel structure strategies.
Mathematics Subject Classification: 90B06
Key words: Game theory / dual-channel supply chain / spillovers / online channel structure / product innovation
© The authors. Published by EDP Sciences, ROADEF, SMAI 2022
This is an Open Access article distributed under the terms of the Creative Commons Attribution License (https://creativecommons.org/licenses/by/4.0), which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
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