The Optimal Strategy Analysis Of Potential Entrant Threat In Multi-Channel

Currently with the rapid development of information technology, the rapid development of Internet companies, birth of many Internet giants, such as Jing Dong, Ali Baba, Amazon, etc., although these companies conduct business through different forms of organization. But all of the traditional sales channels face a threat in the potential e-retailer to entry the online channels. However due to various reasons Internet companies in some industries have not yet entered the market to compete. So the traditional retailers to bring a great threat as potential entrants, traditional retailers focus to maximize its profits from develop optimal channel strategy. And this is the focus of our study.Faced with the threat of potential entrants, the incumbent companies can deter potential entrants to enter through the price, quantity, and different strategies. In this paper, in a multi-channel business environment, traditional retailers by developing its own channel strategy, which limits itself to access the online channel.And this channel strategy can prevent or limit potential entrants to entry the online channel.Based on the research of scholars previously, our the basic model established a three-stage sequential game to prove that under certain conditions, traditional retailers by limiting its own access to the network to prevent potential e-retailer to entry the online channels. After the basic model’s discuss our article extension from the follow three dimension differentiable network channels, differentiable pricing of online and offline price,upstream producers as the potential entrants and not only one incumbent. During our demonstration this article got the same conclusion with the basic model that the incumbent traditional retailer can deter the potential e-retailer to entry the online channel from its owe restraint strategy.