Research On Manufacturer Encroachment Strategy Considering Effort Factor

With the development of e-commerce,the online shopping market has maintained rapid development.Sinking market,cross-border e-commerce and mode innovation have provided new growth drivers for the online shopping market,and the integration of online and offline has accelerated.As consumers become more receptive to online direct sales channels,it is becoming more common for manufacturers to open online direct sales channels to sell products to end consumers,which may lead to competition between suppliers and their independent downstream retailers or distributors.This competition is often referred to in the literature as "manufacturer encroachment ".Coca-Cola and Pepsi,for example,and electronics makers Apple,Dell and Samsung have long sold their products to downstream subsidiaries and rival retailers,and then built their own direct online channels.In practical business practice,encroachment has gradually become an important way for enterprises to enhance channel control and market demand.At the same time,the encroachment of manufacturers on the retail market will erode the market share of retailers,thus leading to the intensification of competition,leading to some retailers to reduce the impact of manufacturers’ encroachment by means of sales efforts and quality efforts.Therefore,this paper studies the manufacturer’s encroachment strategy considering the effort factor,and uses Stackelberg game method and system simulation method to build a decision model to analyze the influence of effort factor on the manufacturer’s invasion decision,and studies the influence of each parameter on the supply chain member’s profit and optimal decision through numerical analysis.The following three aspects are mainly studied: firstly,considering retailer’s sales effort and channel asymmetric substitution,it studies manufacturer’s channel intrusion decision and whether retailer can use sales effort as an anti-encroachment strategy.This paper mainly discusses under what conditions manufacturers will choose to open online direct channels for encroachment,whether retailers should invest in sales efforts,and whether sales efforts can effectively alleviate the negative impact of manufacturers invasion.Secondly,the demand depends on the effect of reference price and quality under the premise of considering a dual-channel consisting of manufacturers and retailers two-stage supply chain,the main research quality to cost,consumer preferences will affect the quality of the supply chain performance,manufacturers invasion,the supply chain members can benefit from cooperation.Finally,considering that demand depends on quality effort and sales effort,this paper studies the influence of quality effort and sales effort of different supply chain members on manufacturer’s encroachment decision,product pricing and supply chain profit,and discusses which manufacturer or retailer has more incentive to invest in quality effort and sales effort.What impact does it have on the manufacturer’s decision to encroach in the context of different members’ investment quality efforts and sales efforts?The results show that retailers’ efforts to promote manufacturers to reduce wholesale prices can effectively alleviate the negative impact of manufacturers’ encroachment.Encroachment is beneficial to manufacturers to improve the quality of products,and the cost sharing contract can coordinate the supply chain parties.Manufacturers are more willing to let retailers invest in quality efforts and sales efforts,while retailers may be reluctant to let manufacturers invest,and when quality and sales efforts are lower and manufacturers encroach,retailers are more willing to invest in both efforts themselves.