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Chinese Journal of Management Science ›› 2019, Vol. 27 ›› Issue (10): 77-89.doi: 10.16381/j.cnki.issn1003-207x.2019.10.008

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Research on Multi-Channel Competition Strategy Considering Introduction of Self-operated Channel by E-commerce Platform and Online Direct Channel by Manufacturer

WEN Yue1,2, WANG Yong1,2, DAN Bin1,2, SHI Ming-jun1,2   

  1. 1. School of Economics and Business Administration, Chongqing University, Chongqing 400044, China;
    2. Chongqing Key Laboratory of Logistics, Chongqing University, Chongqing 400044, China
  • Received:2017-04-14 Revised:2018-11-27 Online:2019-10-20 Published:2019-10-25

Abstract: With the increasing willingness of consumers to shop online, increasing e-commerce platforms not only serve as service providers, matching buyers with sellers, but also sell competing products through their own online platform. At the same time, in order to reduce the disadvantaged position and dependence on e-commerce platform, increasing manufactures, who sell through e-commerce platform, establish their own website to sell the products. As a result, there will be likely to create competition among three channels:self-operated channel managed by the e-commerce platform, platform channel and online direct channel managed by the manufacturer. This new channel competition is worth studying, and which is the focus of this article.
Thus, in this paper, a setting in which an e-commerce platform firm operates an online platform through which manufactures can sell their products to consumers, but who may sell competing products through their own platform (i.e. introduce self-operated channel), is considered. And a single manufacture, who currently sells its product through the platform, but who may establish website to sell its products direct to the consumers (i.e. introduce online direct channel), is considered. Two scenarios are investigated:e-commerce platform introduces self-operated channel and does not, considering two situations:with manufacture introducing direct channel and not. Then, the optimal decision and profit of e-commerce platform and manufacture in these cases are analyzed. Finally, based on the game theory, both players' equilibrium strategies are characterized, then a series of numerical examples to illustrate the correctness of the proposed model are presented.
The main results are as follows:when the cost of introducing online direct channel is low, the equilibrium strategies will be e-commerce platform introduces self-operated channel and manufacturer operates two channels; and if manufacturer's two channels are both strong, both players will fall into prisoner's dilemma, otherwise, e-commerce platform's profit increases and manufacture's decreases. When the cost of introducing online direct channel is moderate, the equilibrium strategies will be e-commerce platform introduces self-operated channel and manufacturer only operates online direct channel; and if manufacturer's two channels are both strong, or the platform channel is moderately competitive and the direct channel is highly competitive, both players will fall into prisoner's dilemma, otherwise, e-commerce platform's profit increases and manufacture's decreases. When the cost of introducing online direct channel is high, if the online direct channel is strong, both players will fall into chicken game. If not, the equilibrium strategies will be e-commerce platform introduces self-operated channel and manufacturer does not introduce online direct channel, in which e-commerce platform's profit increases and manufacture's decreases. In addition, given the rapid growth of e-commerce, understanding the impact this particular form of competition and channel conflict is of critical importance to the success of e-commerce platform firms, as well as the manufactures.

Key words: e-commerce platform, self-operated channel, online direct channel, channel conflict, game theory

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