TY - JOUR
T1 - Population internet penetration rate and channel supply chain players' performances
AU - Yan, Ruiliang
AU - Wang, John
AU - Ghose, Sanjoy
PY - 2009
Y1 - 2009
N2 - With the rapid development of the internet, the population internet penetration rate plays a strategic importance in the dual-channel supply chain. In this research, we use a game-theoretic approach to examine the effect of the population internet penetration rate on the performances of the manufacturer and traditional retailer under the Stackelberg and Bertrand competitive models. Our results suggest that an increase in the population internet penetration rate always has a negative impact on the manufacturer and traditional retailer's profits. Furthermore, when the product is more suitable for the online market, the traditional retailer will be hurt more by the population internet penetration rate. For the manufacturer, although a larger product web fit can increase profits, the population internet penetration rate has a stronger impact on profitability, thus decreasing profits even as the product web fit increases. Our results also suggest that both the manufacturer and the retailer can adopt either of the Stackelberg and Bertrand competitive market structures in the dual-channel supply chain since their profits are unaffected by the two models. The managerial implications of our results are discussed and the probable paths of future research are identified.
AB - With the rapid development of the internet, the population internet penetration rate plays a strategic importance in the dual-channel supply chain. In this research, we use a game-theoretic approach to examine the effect of the population internet penetration rate on the performances of the manufacturer and traditional retailer under the Stackelberg and Bertrand competitive models. Our results suggest that an increase in the population internet penetration rate always has a negative impact on the manufacturer and traditional retailer's profits. Furthermore, when the product is more suitable for the online market, the traditional retailer will be hurt more by the population internet penetration rate. For the manufacturer, although a larger product web fit can increase profits, the population internet penetration rate has a stronger impact on profitability, thus decreasing profits even as the product web fit increases. Our results also suggest that both the manufacturer and the retailer can adopt either of the Stackelberg and Bertrand competitive market structures in the dual-channel supply chain since their profits are unaffected by the two models. The managerial implications of our results are discussed and the probable paths of future research are identified.
KW - Channel competition
KW - Game theory
KW - Marketing strategies
UR - http://www.scopus.com/inward/record.url?scp=69049101299&partnerID=8YFLogxK
U2 - 10.1504/IJIMA.2009.027814
DO - 10.1504/IJIMA.2009.027814
M3 - Article
AN - SCOPUS:69049101299
SN - 1477-5212
VL - 5
SP - 329
EP - 347
JO - International Journal of Internet Marketing and Advertising
JF - International Journal of Internet Marketing and Advertising
IS - 4
ER -