Abstract:

The digital economy and e-commerce have made it possible for manufacturers to sell green products and encroach into the retail market. Although the manufacturer's decentralized encroachment strategy is widely used in domestic and foreign business practices， in current related research， there are few studies on the manufacturer’s decentralized encroachment strategy considering giving more autonomy to their retail subsidiary.Based on this， consumer green preference， channel competition and encroachment costs， and constructs a dual-channel green supply chain centralized encroachmentmodel and a decentralized encroachmentmodel that allows the manufacturer to give its retail subsidiary independent pricing power via a transfer price are considered. Under the centralized encroachment， the retailer and the manufacturer involves in a direct competition in the retail market. The manufacturer produces green products and sells them directly to consumers. The manufacturer makes sales decisions in a centralized manner. At the same time， the manufacturer also wholesales green products to the retailer in traditional wholesale channel.Under the decentralized encroachment， the retailer will compete with the retail subsidiary of the manufacturer， and the manufacturer will sell the green products to its retail subsidiary at a unit transfer price. Due to the transfer price， the face-to-face conflict between the manufacturer and the retailer will be avoided. The retail subsidiary can make independent sales decisions and maximize its own profits.In the modelsproposed in this paper， there is a stackelberg game between the manufacturer and the retailer. Firstly， the backward-induction method is used to solve the equilibrium solution and the encroachment conditions of the centralized and decentralized encroachmentmodels. On this basis， the influence of consumer green preference and channel competition on the green level， sales decision and profits is analyzed under centralized and decentralized encroachment. Secondly， the social welfare under the two encroachment strategies are compared. Finally， numerical simulation is used to explore the effects of consumer green preference， channel competition， and environmental benefit cost coefficients on product greenness， supply chain members’ profits and social welfare， and the robustness of the results is also verified. The research results show that： 1） Under each encroachment strategy， as consumer green preference increases， the manufacturer will invest more in green products， and both the manufacturer and the retailer will benefit. When the channel competition increases，themanufacturer will reduce their R&D investment in green products in order to cope with price competition. 2） Under the decentralized encroachment， the manufacturer reduces the intensity of channel competition with its downstream retailer by imposing a transfer price on its retail subsidiary， thereby improving the profitability of each member in the supply chain and the products’ greenness. In addition， decentralized encroachment can also reduce environmental damage and increase social welfare. Under the environment of advocating green production and consumption， these conclusions provide theoretical support for manufacturing companies to choose decentralized encroachment strategy.

Key words: dual-channel, manufacturer encroachment, green supply chain, consumer green preference, channel competition