Research On Channel Selection Strategies Of Manufacturer Dominated By Retailer

Channel is the only way for manufactures to take products to consumers successfully. Itis the carrier of products’ flow and the way to generate the interest for the manufacturer.Without the channel, the source of manufactures’ interest also could be cut off. So channelselection is very important to manufactures. Many existing literatures about channel selectionof manufactures generally considered the research background based on producemarket-oriented (manufacturers dominate the market). However, in the fierce marketcompetition, the retailer-led supply chain has been formatted. The strong retailers erode theprofits of manufacturers depending on their dominance and market power, which threatens thesurvival of some manufacturers and makes manufactures begin to focus on fairness of thechannel. On the other hand, with the rapid development of B2C e-commerce and logisticstransportation, online shopping is becoming an integral part of consumers’ lives, whichprovides more choice for manufacturers under the domination of retailers. In order to avoidthe loss coming from a strong retailer in the traditional channel model, how should themanufacturers to take action, how to select the channel strategy, what to be based on, and howfairness impact the behavior of their channel strategies? These have become not onlyproblems about channel management research, but also the core issues of this paper.Based on the analysis and summarization of a number of domestic and internationalchannels research results, this paper builds a two-stage supply chain system composed of asingle manufacture and a single retailer. Firstly, this paper builds a base model based on asingle traditional retail channels model dominated by retailer. In this model, the retailer is theleader and manufacture is a follower. The basic model simulates the manufacture’s demand,cost and profits, and analyzes the strong retailer-led decision-making process. Then itdiscusses the optimal decisions of supply chain under decentralized decision and centralizeddecision. The result shows that there is Double Marginalization. It is helpful to improve theprofits of supply chain, if the relationship and behavior of channel members are coordinated.Secondly, the fourth chapter focuses on dual channels, and builds the models ofDual-channel and dual mixed retail channels. Then it discusses the channel selectionstrategies of manufacturer dominated by retailer. The results show that there does not existone which is absolute advantage channel. But hybrid channel is a better choice formanufactures. Because it can excavate the potential demand and is helpful to improve theconsumption effect. Finally, based on the analysis of the third chapter and the fourth chapter,the fifth chapter focuses on manufacture’s fairness about channel. Fairness factor is concerned to three channel models. Then this paper studies the channel selection strategies ofmanufacturer when it concerns channel fairness, and analyzes the impact relationship betweenfairness and supply chain performance through a numerical example. the results show that thefairness of manufacture is an important factor which can impact profits distribution in thechannel and is an effective way to resist the strong retailer. And hybrid channel can helpmanufacture to improve its profits and play a role to improve the performance of the wholesupply chain.