Summary of – Supplier encroachment in the presence of asymmetric retail competition
Document Type
Article
Abstract
Suppliers are increasingly adopting direct channels in addition to their incumbent retail channels. In many industries, heterogeneous retailers with different selling costs compete with each other in the retail channel. Yet, the extant literature on supplier encroachment has not addressed the impact of asymmetric retail competition on supply chain interactions.
Research Goals and Hypotheses
In this paper, the authors use a game-theoretic model to investigate the supplier’s encroachment strategy in the presence of asymmetric retail competition.
Methodological Approach
Game-Theoretic Modeling
Results and Discoveries
Retail competition enhances a cost-efficient retailer’s benefit from supplier encroachment. This result contrasts with the established understanding that retailers are less likely to benefit from supplier encroachment in the presence of retail competition. Further, it is well known that retailers cannot benefit from supplier encroachment when the number of retailers competing is beyond a certain threshold. The authors show that the above result does not necessarily hold when the retailers are asymmetric. Specifically, the authors prove that the efficient retailer might benefit from supplier encroachment irrespective of the number of competing retailers. Finally, they show that asymmetric retail competition not only makes it easier for the supplier to encroach but also boosts the direct selling quantity.
Citation to the base paper:
Arulanantha Prabu Ponnachiyur Maruthasalam, Ganesh Balasubramanian, Supplier encroachment in the presence of asymmetric retail competition, International Journal of Production Economics, Volume 264, 2023, 108961, https://doi.org/10.1016/j.ijpe.2023.108961.
Publication Date
2023
Recommended Citation
Arulanantha Prabu Ponnachiyur Maruthasalam, Ganesh Balasubramanian, Supplier encroachment in the presence of asymmetric retail competition, International Journal of Production Economics, Volume 264, 2023, 108961, https://doi.org/10.1016/j.ijpe.2023.108961.
Publication Date
2023
Recommended Citation
Maruthasalam, APP and Balasubramanian, Ganesh, "Summary of – Supplier encroachment in the presence of asymmetric retail competition" (2023). Open Access archive. 9358.
https://impressions.manipal.edu/open-access-archive/9358
