The Strategic Role of Third‐Party Marketplaces in Retailing

Retailers are increasingly adopting a dual‐format model. In addition to acting as traditional merchants (buying and reselling goods), these retailers provide a platform for third‐party (3P) sellers to access and compete for the same customers. We investigate the strategic rationale for a retailer to introduce a 3P marketplace. Our analysis provides insights into the growing prevalence of 3P marketplaces. We show that by committing to having an active 3P marketplace, the retailer creates an “outside option” that improves its bargaining position in negotiations with the manufacturer. This can explain the increasing prevalence of such marketplaces. On the other hand, the manufacturer would prefer to eliminate the retailer's outside option and should seek to limit or prevent sales through 3P marketplaces. This is consistent with actions that several manufacturers have taken to limit such sales. Interestingly, if the manufacturer fails to eliminate sales of competing products through the 3P marketplace, then the best strategy for the manufacturer is to allow the retailer to dictate the terms of their contract. This is because a powerful retailer will rely less on its outside option in generating profit, and therefore it will increase the fees charged to 3P sellers and soften the competition between 3P sellers and the manufacturer. The decrease in competition will lead to an increase in the value of outside option of the manufacturer and improve its profit. Additionally, we find that the presence of a 3P marketplace benefits consumers, but this benefit diminishes as the retailer becomes more powerful.     

Category Captainship vs. Retailer Category Management under Limited Retail Shelf Space

Shelf‐space scarcity is a predominant aspect of the consumer goods industry. This paper analyzes its implications for category management. We consider a model where two competing manufacturers sell their differentiated products through a single retailer who determines the shelf space allocated to the category. The scope of category management is pricing. We consider two category management mechanisms: retailer category management (RCM), where the retailer determines product prices and category captainship (CC), where a manufacturer in the category determines them. Our analysis reveals that the retailer can use the form of category management and the category shelf space to control the intensity of competition between manufacturers to his benefit. We also show that the emergence of CC depends on the degree of product differentiation, the opportunity cost of shelf space, and the profit sharing arrangement in the alliance. The equilibrium category shelf space under CC may be higher than under RCM if the value to the retailer of eliminating double marginalization and putting price pressure on the non‐captain manufacturer dominates the loss from sharing the profit with the category captain. CC has been criticized for disadvantaging non‐captain manufacturers. While we provide some support for this claim, we also find that CC may benefit non‐captain manufacturers when implemented by a powerful retailer in categories with sufficiently differentiated products, because the shelf space allocated to the category increases in this case.     

考虑电商平台服务投资的平台渠道引入策略

针对由单个制造商和单个电商平台组成的在线销售系统,构建了电商平台无服务投资下是否引入平台渠道、电商平台服务投资下是否引入平台渠道的四个决策模型,运用博弈论方法,探讨了电商平台服务投资决策对平台渠道引入决策的影响。发现：电商平台服务投资可促进平台渠道的引入,且促进效应随着消费者对服务敏感程度的增加而增加;只有当平台渠道的佣金费率处于中等范围且平台渠道的销售成本较小时,在线销售系统中才有可能引入平台渠道;电商平台服务投资是一种占优策略,且可实现帕累托改进。最后,研究表明制造商使用两部定价策略可以促使电商平台提供使系统收益最大化的服务水平,进一步实现双赢。     

Two-period pricing and ordering policy for the dominant retailer in a two-echelon supply chain with demand uncertainty

Retailing channels are increasingly being dominated by ‘power’ retailers who are in a position to dictate prices and ordering schedules to manufacturers and suppliers. A dominant retailer, such as Wal-Mart, has the ‘power’ to decide retail prices of products because there are so many manufacturers who are keen to sell their products through or to such a large and powerful retailer. Several products, such as electronic products, can be sold in the market for some periods during their lifecycles before they retreat, except when they are not popular with consumers after been introduced. Therefore, in case of such products, the retailer should not just consider a single-period pricing and ordering policy. It should make dynamic pricing and ordering decisions based on market demand forecast, in order to obtain maximum cumulative profit from the product during its lifecycle. In this study, we consider this scenario and construct a two-period model to discuss pricing and ordering problems for a dominant retailer with demand uncertainty in a declining price environment. We show that the maximum expected profit function is continuous concave, so the optimal solution to pricing and ordering policy exists and it is the one and only. We also analyze sensitivity of retailer's expected profit to the effects of parameters of price-discount sharing scheme and market demand.     

P2P Marketplaces and Retailing in the Presence of Consumers' Valuation Uncertainty

Can peer‐to‐peer (P2P) marketplaces benefit traditional supply chains when consumers may experience valuation risk? P2P marketplaces can mitigate consumers' risk by allowing them to trade mismatched goods; yet, they also impose a threat to retailers and their suppliers as they compete over consumers. Further, do profit‐maximizing marketplaces always extract the entire consumer surplus from the online trades? Our two‐period model highlights the effects introduced by P2P marketplaces while accounting for the platform's pricing decisions. We prove that with low product unit cost, the P2P marketplace sets its transaction fee to the market clearing price, thereby extracting all of the seller surplus. In this range of product unit cost, the supply chain partners are worse off due to the emergence of a P2P marketplace. However, when the unit cost is high, the platform sets its transaction fee to be less than the market clearing price, intentionally leaving money on the table, as a mechanism to stimulate first period demand for new goods in expectation for some of them to be traded later, in the second period, via the marketplace. It is not until the surplus left with the sellers is sufficiently high that the supply chain partners manage to extract some of this surplus, ultimately making them better off due to a P2P marketplace. We further analyze the impact of a P2P marketplace on consumer surplus and social welfare. In addition, we consider model variants accounting for a frictionless platform and consumer strategic waiting.     

Design of Extended Warranties in Supply Chains under Additive Demand

We study the design of extended warranties in a supply chain consisting of a manufacturer and an independent retailer. The manufacturer produces a single product and sells it exclusively through the retailer. The extended warranty can be offered either by the manufacturer or by the retailer. The party offering the extended warranty decides on the terms of the policy in its best interest and incurs the repair costs of product failures. We use game theoretic models to answer the following questions. Which scenario leads to a higher supply‐chain profit, the retailer offering the extended warranty or the manufacturer? How do the optimum price and extended warranty length vary under different scenarios? We find that, depending on the parameters, either party may provide better extended warranty policies and generate more system profit. We also compare these two decentralized models with a centralized system where a single party manufactures the product, sells it to the consumer, and offers the extended warranty. We also consider an extension of our basic model where either the manufacturer or the retailer resells the extended warranty policies of a third party (e.g., an independent insurance company), instead of offering its own policy.     

Channel Structure Design for Complementary Products under a Co‐Opetitive Environment

In the high‐tech industry, firms can be partners in one respect (e.g., resellers) and competitors in another. In this article, we investigate the channel structure problem for two firms‐each selling competing products in two complementary markets—who are deciding whether to sell their products to customers directly or distribute one of them through a competitor. The customers are heterogeneous and both firms have products that are horizontally differentiated. When selling products directly, the firm can coordinate the prices of the two complementary products and avoid the inefficiency of double marginalization. However, selling (indirectly) through the competing manufacturer can mitigate competition because the competitor shares the profit of both competing products and therefore does not price its own products aggressively. One might expect that when the externality across the markets is strong, firms would prefer to sell both products directly (rather than through the competitor) in order to take advantage of the complementarity between markets and eliminate the inefficiency of double marginalization. Interestingly, we find that even though the first mover chooses to sell both products directly, the second mover forsakes the opportunity to coordinate the prices of its products and instead opts to distribute one of the products through the first mover.     

Assortment Planning for Vertically Differentiated Products

We consider the problem of a retailer managing a category of vertically differentiated products. The retailer has to pay a fixed cost for each product included in the assortment and a variable cost per product sold. Quality levels, fixed, and variable costs are exogenously determined. Customers differ in their valuation of quality and choose the product (if any) that maximizes their utility. First, we consider a setting in which the selling prices are also fixed. We find that the optimal set of products to offer depends on the distribution of customer valuations and might include dominated products, that is, products which are less attractive than at least one other product, on every possible dimension. We develop an efficient algorithm to identify an optimal assortment. Second, we consider a setting in which the retailer also determines the selling prices. We show that in this case the optimal assortment does not include any dominated product and does not vary with the distribution of customer valuations when there is no fixed cost. We develop several efficient algorithms to identify an optimal assortment and optimally price the products. We also test the applicability of our methods with realistic data for two product categories.     

基于绿色技术研发的绿色供应链微分博弈及协调模型

本文以单个制造商和单个零售商组成的二级绿色供应链为背景，建立了绿色技术研发的绿色供应链微分博弈模型，比较了集中和分散决策下的微分博弈均衡解。最后，通过动态批发价机制对绿色供应链成员进行合作协调，并采用数值仿真对结果进行了验证和说明。研究发现：1)与分散决策相比，集中决策下绿色技术水平和绿色渠道总利润较高；2)当协调参数在一定范围内时，动态批发价机制能够协调制造商和零售商的行为，并且在该种模式下，绿色技术水平、产品绿色度以及商品的价格均达到了集中决策下的情形；3)在动态批发价机制下，随着绿色投资成本系数的增加或价格敏感度的增加或消费者环保意识的下降，绿色技术水平、产品绿色度、商品价格、零售商的利润以及绿色渠道总利润是下降的，而商品批发价和制造商的利润则是增加的。     

Stockout Recovery under Consignment: The Role of Inventory Ownership in Supply Chains

We examine how a supply chain firm may implement an incentive contract under inventory consignment to recover stockouts and to retain customers. Inventory consignment allows an upstream firm (e.g., a manufacturer) to own and control inventory at a downstream firm (e.g., a retailer), representing a structural change in supply chain governance. Motivated by cases in pet toy and electronics component industries, we formulate principal–agent models based on the newsvendor framework to capture the strategic interactions in a supply chain. We find that consignment can be effective in reducing stockouts because the ownership and control of the product by the manufacturer allows better prevention of stockouts, which complements stockout recovery and leads to fewer stockouts. However, the lower level of stockout under consignment does not necessarily translate into profitability—when the manufacturer is highly opportunistic, that is, readily exploring outside opportunities for its product, consignment may lead to lower profitability for both the manufacturer and the supply chain. On the other hand, consignment will improve profitability for the manufacturer and the supply chain, if both the manufacturer opportunism and the retailer opportunism are moderate.      

Skill Management in Large‐Scale Service Marketplaces

Large‐scale, web‐based service marketplaces have recently emerged as a new resource for customers who need quick resolutions for their short‐term problems. Due to the temporary nature of the relations between customers and service providers (agents) in these marketplaces, customers may not have an opportunity to assess the ability of an agent before their service completion. On the other hand, the moderating firm has a more sustained relationship with agents, and thus it can provide customers with more information about the abilities of agents through skill screening mechanisms. In this study, we consider a marketplace where the moderating firm can run two skills tests on agents to assess if their skills are above certain thresholds. Our main objective is to evaluate the effectiveness of skill screening as a revenue maximization tool. We, specifically, analyze how much benefit the firm obtains after each additional skill test. We find that skill screening leads to negligible revenue improvements in marketplaces where agent skills are highly compatible and the average service times are similar for all customers. As the compatibility of agent skills weakens or the customers start to vary in their processing time needs, we show that the firm starts to experience sizable improvements in revenue from skill screening. Apparently, the firm can reap the most of these substantial benefits when it runs only one test. For instance, in marketplaces where agents posses uncorrelated skills, the second skill test only brings an additional 2% improvement in revenue. Accounting for possible skill screening costs, we then show the optimality of offering only one test when the compatibility between agent skills is sufficiently low. The results of this study also have important implications in terms of the right level of intervention in the marketplaces we study.     

不同渠道权力结构下资金约束零售商的采购和融资策略

针对由供应商、3PL企业和资金约束零售商组成的供应链,研究了三种渠道权力结构（以供应商为主导的S权利结构、以3PL企业为主导的L权利结构、供应商和3PL企业同时主导的N权力结构）和两种融资模式（3PL企业融资服务和贸易信贷融资）下零售商的采购和融资策略。首先,分别构建了针对三种渠道权力结构和两种融资模式的以供应链成员利润最大化为目标的优化模型,并通过求解模型得到了供应商、3PL企业和零售商的最优定价策略;然后,通过比较不同情形下的供应链成员利润,分析了零售商的采购和融资策略。研究结果表明：在S权力结构下,零售商应选择直接向供应商订货并接受贸易信贷融资模式;在L权力结构下,零售商应选择接受3PL企业的代理采购和融资服务;在N权力结构下,零售商应选择融资利率更高的采购和融资模式。此外发现,供应商和3PL企业均应选择优先宣布定价策略,当二者在市场中权力相当时,其应该调高各自的融资利率。     

Financial Hedging and Optimal Procurement Policies under Correlated Price and Demand

We consider a firm that procures an input commodity to produce an output commodity to sell to the end retailer. The retailer's demand for the output commodity is negatively correlated with the price of the output commodity. The firm can sell the output commodity to the retailer through a spot, forward or an index‐based contract. Input and output commodity prices are also correlated and follow a joint stochastic price process. The firm maximizes shareholder value by jointly determining optimal procurement and hedging policies. We show that partial hedging dominates both perfect hedging and no‐hedging when input price, output price, and demand are correlated. We characterize the optimal financial hedging and procurement policies as a function of the term structure of the commodity prices, the correlation between the input and output prices, and the firm's operating characteristics. In addition, our analysis illustrates that hedging is most beneficial when output price volatility is high and input price volatility is low. Our model is tested on futures price data for corn and ethanol from the Chicago Mercantile Exchange.     

The Effect of Competition on Recovery Strategies

Manufacturers often face a choice of whether to recover the value in their end‐of‐life products through remanufacturing. In many cases, firms choose not to remanufacture, as they are (rightly) concerned that the remanufactured product will cannibalize sales of the higher‐margin new product. However, such a strategy may backfire for manufacturers operating in industries where their end‐of‐life products (cell phones, tires, computers, automotive parts, etc.) are attractive to third‐party remanufacturers, who may seriously cannibalize sales of the original manufacturer. In this paper, we develop models to support a manufacturer's recovery strategy in the face of a competitive threat on the remanufactured product market. We first analyze the competition between new and remanufactured products produced by a monopolist manufacturer and identify conditions under which the firm would choose not to remanufacture its products. We then characterize the potential profit loss due to external remanufacturing competition and analyze two entry‐deterrent strategies: remanufacturing and preemptive collection. We find that a firm may choose to remanufacture or preemptively collect its used products to deter entry, even when the firm would not have chosen to do so under a pure monopoly environment. Finally, we discuss conditions under which each strategy is more beneficial.     

基于MNL选择模型的替代产品定价和库存决策研究

受现实中生产商和大型零售商不同契约关系的启发,本文以两个生产商和一个零售商组成的系统为对象,从顾客在两种替代性产品之间的选择行为出发,分别研究了零售商定价和生产商定价模式下的最优产品定价和库存决策。研究表明,在MNL选择模型下,零售商联合定价时应当选择使得产品单位利润相等的定价策略;生产商定价博弈中存在唯一的Nash均衡。数值实验分别考察了"生产商强势"和"零售商强势"两种情形下的最优决策和利润分配情况;实验结果能给相关企业的销售模式选择带来有益的管理启示。     

Should an OEM Retain Component Procurement when the CM Produces Competing Products?

We consider a large original equipment manufacturer (OEM) who relies on a contract manufacturer (CM) to produce her product. In addition to the OEM's product, the CM also produces for a smaller OEM. Both the larger OEM and the CM can purchase the component from the supplier, but their purchase prices may differ and remain unknown to each other. The main question we address is whether the larger OEM should retain component procurement by purchasing components from the supplier and reselling to the CM (buy–sell), or outsource component procurement by letting the CM purchase directly from the supplier (turnkey). We show that, under buy–sell, the larger OEM's optimal strategy is to resell components at the highest possible component purchase price of the CM (i.e., the street price). By comparing buy–sell and turnkey, we find that a CM with low component price is better off under turnkey, even though under buy–sell he receives more profits through the products sold to the smaller OEM. Furthermore, the larger OEM's preference between buy–sell and turnkey depends on her component price, the volatility of the CM's component price and substitutability between the two products.     

Advance Selling by a Newsvendor Retailer

Retailers often face a newsvendor problem. Advance selling helps retailers to reduce demand uncertainty. Consumers, however, may prefer not to purchase in advance unless given a discount because they are uncertain about their valuation for the product in advance. It is then unclear whether or when advance selling to pass some uncertainty risk to consumers is optimal for the retailer. This paper examines the advance selling price and inventory decisions in a two‐period setting, where the first period is the advance selling period and the second is the selling (and consumption) period. We find that an advance selling strategy is not always optimal, but is contingent on parameters of the market (e.g., market potential and uncertainty) and the consumers (e.g., valuation, risk aversion, and heterogeneity). For example, we find that retailers should sell in advance if the consumers' expected valuation exceeds consumers' expected surplus when not buying early by a certain threshold. This threshold increases with the degree of risk aversion but decreases with stock out risk. If the degree of risk aversion varies across consumers, then a retailer should sell in advance if the probability for a consumer to spot buy is less than a critical fractile.     

拥有自有品牌零售商的平台开放策略研究

随着电子商务的快速发展，零售商之间竞争加剧，自有品牌战略成为零售商获取竞争优势的关键。研究拥有自有品牌零售商的平台开放策略，通过对比零售商不开放平台和开放平台下的均衡利润，给出零售商平台开放策略选择条件，并分析产品之间价格影响系数、固定成本和潜在需求差异系数对零售商平台开放策略选择的影响，最后结合数值分析和京东自有品牌的发展现状验证了本文的主要研究结论。研究发现：第一，随着固定成本的增加，佣金费率逐渐减少，随着潜在需求差异系数的增加，佣金费率逐渐增加；第二，当产品之间的价格影响系数较小（较大）时，平台开放（不开放）是零售商的最优选择；第三，当固定成本较小（较大）时，平台开放（不开放）是零售商的最优选择；第四，当潜在需求差异系数较小（较大）时，平台开放（不开放）是零售商的最优选择。     

To sell or not to sell to an off-price retailer in the presence of strategic consumers

In the newsvendor model, strategic consumers choose between buying the product at the regular price or waiting to try to buy the product at the discount price. Retailers can benefit from the ability to decrease strategic consumers’ perceived probability of finding a unit available at the discount price. Selling some inventory to an off-price retailer, who has a large number of thrift consumers, enables retailers to change consumers’ perceived probability of product availability at a reduced price, but at a cost of losing some strategic consumers to the off-price retailer. We show that without the off-price retailer’s exclusive consumers and even if the off-price retailer buys the product for a price below the retailer’s cost, the retailer can still be better-off with the off-price retailer. We also find that the retailer benefits more when the off-price retailer charges higher price for the product and has a large consumer segment of its own.     

Optimal Contract Design for Mixed Channels Under Information Asymmetry

The mixed‐channel model is becoming increasingly popular in the marketplace. In this model, a firm selling through the traditional supply chain of wholesaler and retailer opens a direct channel to the customer through Internet sales. Because both channels have their respective advantages, the manufacturer is attracted to this business model. However, it also leads to channel conflict, with the retailer feeling threatened by direct competition. One way of eliminating the possibility of this channel conflict, where the retailer is allowed to add value to the product to differentiate its offering to the customers, is proposed in this paper. The retailer is also given full authority to make pricing decisions. This paper presents a model, under this scenario, of obtaining optimum pricing decisions by both parties, the amount of value added by the retailer, and the manufacturer's wholesale price to the retailer. Our model incorporates information asymmetry, where the manufacturer has incomplete information about the retailer's cost of adding value. We obtain closed‐form contracts with incomplete information and compare them with those with complete channel coordination. We also develop a number of managerial guidelines and identify future research topics.