Research On Competition And Coordination Strategy Of Manufacturers And Distributors In E-Commerce

With the development of internet and e-commerce, consumers’ attitudes and consumption patterns change gradually. More and more consumers like online shopping. The change promotes e-commerce sales channels to become an independent distribution channel. Traditional distribution channel is that manufacturers sell products to distributors and distributors then sell products to consumers. Yet, manufacturers now sell product to customers directly through e-commerce channels. E-commerce expands the range of distribution channels, providing consumers with a new consumption patterns, tending to flatten the structure of distribution channels, improving channel efficiency, reducing channel costs. Meanwhile, e-commerce sales channel has its defects, because the customer can not touch products and judge the products’ quality only through a few pictures. After manufacturers open e-commerce sales channels, manufacturers’ e-commerce channels and distributors’ traditional distribution channels occur competition inevitably. What pricing strategy of e-commerce channel do the manufacturer take and what strategy do manufacturer take to compete with distributors and how coordinate with the competitive relationship with distributors become an urgent problem to solve.In order to solve the above problems, this paper distinguishes the manufacturers’ e-commerce sales channel and traditional distribution channels on the basis of previous studies. Firstly, the paper study competitive strategy of manufacturers and distributors through building a simple supply chain model that is a manufacturer, a distributor and customers. The paper use utility theory to establish dual-channel consumer demand functions of manufacturer and distributor and study the Stackelberg pricing strategy and Bertrand pricing strategy between manufacturer and distributor. And through comparison and numerical simulation models paper verify the e-commerce sales channel’s sales price are generally lower than the selling price of traditional distribution channels. At the same, result is that manufacturer will select the Stackelberg pricing strategy which would make manufacturers, distributors, overall supply chain’s profits greater.Then paper studies the coordinate policy issues of manufacturer and distributor. According to a simple supply chain model, paper establishes a demand function for manufacturer’s e-commerce sales channels and distributor’s traditional distribution channels. Through modeling, the paper analysis price and the profit of centralized decision and split decision. Result is that coordination between the manufacturer and distributor is necessary. Then the paper design several coordinated strategies, use a variety of numerical simulation methods and coordinated strategy analysis to draw coordination strategies prices and profitability finally. Studies show that:quantity discount contracts and two step price contracts are both able to achieve coordination and the effect is equivalent. Manufacturers promote mixing channel to reach a coordinated program has an infinite number and manufacturers and distributors profits were greater than the profits under coordination uncooperative within a certain range. Manufacturer’s e-commerce sales channel does not mean a threat to distributor and manufacturer’s e-commerce sales and distributor’s traditional distribution channels can be competing together while cooperating with each other. Finally, the paper put forward several recommendations about coordinated strategy between manufacturers and distributors...