| The problem of "parallel imports" is examined from the perspective of a manufacturer managing a multinational supply chain. Parallel imports are unauthorized product flows from lower-priced countries into higher-priced countries that rival existing authorized channels. They are generally believed to threaten the manufacturer's profits and deteriorate its relationship with distributors along the supply chain.; This dissertation consists of three essays on the study of parallel imports. Essay 1 uses a game theory approach to cast some light on the role of parallel imports as an effective market segmentation tool, and analyze the manufacturer's pricing and product strategies. Parallel imports are found to expand the manufacturer's global sales volume and in some cases increase profits. Under different market conditions, strategies are suggested to allow or prevent parallel imports, by coordinating prices in different countries and coordinating prices with product design and warranty decisions.; Essay 2 uses a newsvendor model to study distributor's excess inventories as a source for parallel imports, and uses a principal-agent model to solve the optimal supply contract offered by the manufacturer when the distributor has private information about parallel imports potential. It identifies market uncertainty, distributor inventory, production batching, and supplier discount as four reasons within the supply chain that provide incentives for the manufacturer to offer a volume discount that intensifies the parallel imports problem at the distributor's level.; Essay 3 is a comparison study of parallel imports with product counterfeiting and user piracy as three important areas of unauthorized products. It analyzes their intrinsic relationships along dimensions of source position in supply chain, product duplicability, consumer awareness, and product quality. It reveals their seemingly unlikely strategic values for legitimate manufacturers, which should be incorporated into new rational approaches to construct policies against the additional competition from unauthorized products.; This thesis is the first rigorous study on some managerial issues around the important trade phenomenon of parallel importation, which provides a good application setting to study the impact of increasing globalization and competition on supply chain management. |
