Journal
INTERNATIONAL JOURNAL OF PRODUCTION ECONOMICS
Volume 165, Issue -, Pages 100-111Publisher
ELSEVIER
DOI: 10.1016/j.ijpe.2015.03.001
Keywords
Dual-channels; E-commerce; Supply chain management; Multi-channel marketing
Categories
Funding
- National Natural Science Foundation of China [71002084, 71302035, 71471162]
- Zhejiang Provincial Natural Sciences Foundation of China [LY14G020001]
- Collaborative Innovation Center of Building of Modern Commercial Circulation System [14SMXY17ZD]
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In this paper, we examine the effects of electronic commerce (e-commerce) channel entry on the profitability and behavior of manufacturers and physical retailers within a distribution system. We compare two distribution structures, namely, single and dual channel. In our dual-channel model, the new e-commerce channel is independent of the manufacturer and the physical retailer. Our findings indicate that for these kinds of channel structures, the dual-distribution channel may be unprofitable to the manufacturer, and that the physical retailer may benefit from e-commerce channel entry. We show that if e-channel efficiency is adequately low or the acceptance of the conventional channel is low, the e-commerce channel may dominate the distribution system; otherwise, the conventional channel may dominate. If the channel acceptance of a conventional channel is below a certain threshold, the manufacturer may benefit from e-channel entry; otherwise, the manufacturer is placed at a disadvantage. If the e-channel is sufficiently competitive, then using the e-channel becomes a useful strategy for the manufacturer. Finally, we show that the manufacturer may be worse off selling in a dual-channel distribution structure if e-channel efficiency is low. This observation is important because in adopting a less efficient new channel is disadvantageous to the manufacturer. (C) 2015 Elsevier B.V. All rights reserved.
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