243 / 2024-04-23 19:57:18

The dual-purpose retailer's information sharing when confronting supplier encroachment

Dual-purpose retailer;,Information sharing;,Supplier channel selection

With the continuous progress of commerce and civilization, an increasing number of companies are beginning to simultaneously focus on profit and consumer interests, actively engaging in addressing social issues. In this context, the paper considers a supply chain with dual purpose focus, where the supplier can distribute its products either through the retail channel or the direct channel, while the dual-purpose retailer has private demand information and decides whether to share it with the supplier. We explore the strategic interaction between retailer's information disclosure and supplier's sales channel decisions, then analyze the motivation of the dual-purpose retailer to proactively discloses demand information to the upstream supplier and identify the impact of consumer concerns on equilibrium decisions. Our research findings suggest that the dual-purpose retailer is likely to voluntarily share information with the supplier across different types of market demand, and the retailer's focus on consumers can lead to a balance between the information disclosure and supplier channel encroachment. Specifically, the emphasis on consumer surplus motivates the retailer to utilize information sharing to deter supplier encroachment, or it may motivate the supplier to choose the direct channel. In addition, we determine the impact of the retailer's focus on consumers, and we observe that when the retailer prioritizes consumer welfare, it consistently diminishes the supplier's incentives to sell its products through the direct channel. This enables the retailer to make information decisions that are less sensitive to the supplier's direct efficiency. Surprisingly, we also find that although the retailer is concerned about the interests of the consumers, his information decisions are not always favorable to consumers.