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Articles

The Strategies of B2C Platform Open and Online Retailers Entry Based on Reputation

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  • School of International Business Administration, Shanghai University of Finance & Economics, Shanghai 200433, China

Received date: 2015-10-15

  Revised date: 2016-04-26

  Online published: 2017-05-27

Abstract

In recent years, the traditional retailers are moving towards the platform model and more and more retailers begin to take hybrid model. The development of hybrid model makes it necessary to have a hybrid platform with online marketplaces and physical stores need to decide whether to open platform, and online retailers also need to decide whether to entry the platform. Based on the reputation of retailer, a consumer utility function is built up, and the hybrid platform with online marketplaces and physical stores whether open platform and the online retailer whether entry the platform is considered in this paper. Through the analysis and comparison of equilibrium prices and profits of the two retailers, the conditions of hybrid platform with online marketplaces and physical stores open platform and online retailer entry the platform are given. Finally, a numerical study is conducted to analyze the relationships among the strategies of retailers, such as the cross-group network externalities of platform, the type of consumer, the reputation of retail and the cost of reputation. It is not only found that the reputation of retailer, the cross-group network externalities of platform and the cost of reputation are the most important factor to influence the choice of hybrid platform with online marketplaces and physical stores and online retailer, but also that the proportion of online consumers, the reputation of online retailer and the cost of reputation have a negative impact on profits of hybrid platform with online marketplaces and physical stores, and the cross-network externalities and the reputation of hybrid platform with online marketplaces and physical stores has a positive impact on its profits; in addition to the cross-group network externalities of platform have a positive impact on profit of online retailer, and the cost of reputation have a negative impact on profit of online retailer, other factors that affect the profit of online retailer are not monotonous, its profits will increase on first and then decrease.

Cite this article

LI Pei, WEI Hang . The Strategies of B2C Platform Open and Online Retailers Entry Based on Reputation[J]. Chinese Journal of Management Science, 2017 , 25(3) : 172 -180 . DOI: 10.16381/j.cnki.issn1003-207x.2017.03.020

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