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A Study on the Three Different Channel Models in Supply Chain Under the Network Externalities

  • Jinjiang Yan
  • Jiankai XingEmail author
  • Kai Zhu
  • Ke Liu
Conference paper
Part of the Lecture Notes on Multidisciplinary Industrial Engineering book series (LNMUINEN)

Abstract

With the rapid developments of Internet, many manufacturers and retailers choose not only the offline channel but also the online channel. According to the choices of different channels, this paper models three types of channel models in supply chains. Considering the presence of the network externalities, the degree of substitution between online and offline channels and consumers’ preference for two entities (the manufacture and the retailer), we study the effect of retailer’s choice to online channel and the differences among the three different channel models. Our main findings are that compared to the first two models, the sales price of unit product will be smaller and in contrast the market size will be bigger in the third model. Also, when the entities make the best strategies, the retailer’s profit and the total profit of the channel can reach the maximum. The study shows that the introduction of online channel can create more social values, which is why the dual-channel model of retailers is so widespread. In the end, a numerical example is given to verify the conclusions.

Keywords

Network externality Supply chain Online channel Offline channel 

Notes

Acknowledgements

This research is funded by The Soft Science Research Project of Sichuan Province (No. 2016ZR0042).

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Copyright information

© Springer International Publishing AG 2018

Authors and Affiliations

  1. 1.Business SchoolSichuan UniversityChengduPeople’s Republic of China

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