Research On Channel Structure Selection Strategy Of Manufacturer With Different Powers

As with the gradually improved thought of Internet as well as the proliferation and maturity of Internet/3G or 4G technologies, the Internet is subverting the lifeline of all industries. Therefore enterprises often gambling with competitors from various points of view. Hence, the optimization decision-making of supply chain management under e-business environment will have profound realistic meaning to operations managements of certain enterprises.This paper starts elaborate its research perspective from product substitutability, probing the optimal pricing, the optimization decision-making and the optimization of customers? utility from manufacturers who have direct network sales mode and those who do not have direct network sales mode respectively.This paper uses two manufacturers and one common retailer as objects of study to probe the behaviors of manufacturers who have direct network sales mode. Under the four circumstances that manufacturers who have even or uneven manufactory strength; manufacturers who have even or uneven manufactory strength with the dealers, the paper subdivides eight sub-game strategies using MS, RS and VS, then comparing the impact of substitutability of various products on members of supply chain to achieve perfect Nash equilibrium condition, realizing the optimization decision-making of manufacturers? profit, retailer? profit and customer utility. The research conclusions indicate that strong manufacturer not always gain more profits than weak manufacturer; the substitution of products have more impact on strong manufacturer than that on weak manufacturer. Therefore, weaker manufacturer can achieve the optimization of various game models using substitution of products when there is in adverse market position. The profit of retailer accumulates with the augment of substitution of products. Customers can gain maximize utilities when manufacturers and retailer on markets have equal powers simultaneously. We also takes into consider the circumstance when single manufacturer has direct channel and both manufacturers have direct channels when manufacturers open direct channels. By using the game strategies of MS, RS and VN, the research results indicate the substitution ability of products have profound impact on manufacturers when opening direct channels. Further, those manufacturers who open direct channels do not always gain more profits than that traditional channel. Hence, manufacturers should not open network direct sales channels aimlessly. Retailer should support opening online direct sales channels when then can earn more profits than not. Besides for customers, when the product is more substitutable, the effect customer welfare in online sales channel is inferior to traditional channel, vice versa.