Mixed Channel OEM Supply Chain Pricing and Service Competition Strategy Considering Brand Dealer Penalties

Jianjun YU, Xin XU

Abstract


The paper constructs a mixed channel OEM supply chain model consisting of brand dealer and manufacturer, with brand dealer acting as the main parties of Stackelberg and manufacturer as the subordinate. This paper compares the profit changes of the supply chain in three situations: single brand channel, the mixed dual channel after the manufacturer opens the direct channel and dual channels where brand dealer penalize manufacturer for direct sales channels. The research results prove that the introduction of direct sales channels by manufacturer can enhance the advantages of the game and gain more profits. Under certain conditions, brand dealer would also benefit from the introduction of direct sales channels, so as to achieve a win-win result. When brand dealers’ profits are infringed, brand dealer can reduce the losses caused by direct sales channels by punishing direct sales channels. What’s more, the better the direct channel acceptance, the better the effect of the method. The total profit of the supply chain is reduced with the increase of the direct channel acceptance.


Keywords


Mixed channel; Brand premium; Price and service decision; Punishment means

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References


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DOI: http://dx.doi.org/10.3968/10708

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