Research On The Business Model Of Brick-and-mortar Retailers Based On Vertical Market Power

China’s retail industry has developed rapidly in recent years,and competition between physical retailers has gradually increased.At the same time,the game between physical retailers and suppliers has become more intense.In the game between the zero and the supply sides,the relative vertical market power of the two not only affects the total amount of profit,but also determines the distribution of profit between the two.At the same time,the business model determines the functions and profit models of physical retailers.Many physical retailers have comprehensively operated to gradually develop self-operated businesses.Some enterprises have improved their business conditions,and some have intensified their own business difficulties.Why do physical retailers gradually develop their own business model? Why are there differences in the operating conditions of physical retailers that operate in a proprietary mode? What factors are affected by the choice of the physical retailer’s business model? The answer to these questions can not only provide a theoretical basis for the choice of the physical retailer’s business model,but also promote the healthy development of China’s retail industry.Based on the combing of related literatures,this paper constructs a dynamic game model based on the differences between the relative vertical market forces and profit models of the zero-supply parties,and studies the relative vertical market power of the zero-supply parties and the economies of scale of the commodity operations.The influence of mode selection,and the use of MATLAB for numerical simulation analysis,the theoretical results were tested.The study found that:(1)If the retailer-supply monopoly is monopolized,the physical retailer chooses the joint-venture model to make a higher profit;if the retailer monopolizes and the supplier competes,when the commodity operation scale is economically strong,the physical retailer chooses the self-operated model.The profit is higher.(2)If the retailer competes and the supplier monopolizes,when the economies of scale of the commodity operation are strong,the supplier chooses the double-joint mode to make higher profits,and the physical retailer can only passively accept the business mode selected by the supplier;Both parties are competing.When the economies of scale of commodity operations are strong,the physical retailers choose to have a dual self-operated model to make a higher profit.In short,the physical retailer should choose a higher profitable business model for the difference between the relative vertical market power of the zero supply and the combination of its functions and profit models under different business models.