Effects of risk attitudes and investment spillover on supplier encroachment

Joint pricing and replenishment policies for risk‐averse retailers under duopolistic competition

“…Our study differs by highlighting the price competition between two risk‐averse retailers who sell two substitutable products separately in the end market. Other works which employ the MV approach in exploring supply chain risks include, among many others, mass customization (Choi et al, 2019; Guo & Liu, 2020), supply chain finance (Li et al, 2018; Shen et al, 2020), supplier encroachment (Chen et al, 2020; Li & Jiang, 2019), and asymmetric risk preference (Arcelus et al, 2007; Deng et al, 2013; Shen et al, 2019).…”

Supplier Encroachment in the Supply Chain in the E-Commerce Age: A Systematic Literature Review

“…Chen et al [46] demonstrate that it is necessary for the supplier to open an online direct channel so that the retailer will no longer introduce her discount store, even though the fixed encroachment cost is sufficiently high. It is illustrated that the supplier, as well as the retailer, can achieve profit improvement in the face of the supplier's encroachment given a moderate risk attitude [11]. Zhang et al [47] find that the online platform's retail service investment may be intended to induce the supplier to set his own direct channel on the platform.…”

“…The prevalence of supplier encroachment drives many researchers to study its impacts considering the retail service investing (e.g., [5,36,47,59]), the supplier's production cost reduction investment (e.g., [11,21,22]), the innovation spillover effect [51] or the supplier's product quality investment [14]. To be more specific, Xia and Niu [5] study the impact of supplier encroachment on supply chain members' performances under different power structures in the presence of service spillovers.…”

“…This is significantly different from [21] which suggests that the retailer's profit could be increased by the spillover effect and finally the Pareto improvement can be obtained for the supply chain. Similarly, Chen et al [11] investigate the common influences of supply chain members' risk attitudes and the upstream production cost reduction investment on the supplier's encroachment strategy, and show that the supplier and the retailer may achieve the "win-win" situation in certain conditions.…”

“…In light of the survey reported by the New York Times, about 42% of the top suppliers have established direct selling channels in the retail market through their own online or physical stores [4]. For example, electronic product suppliers, such as Apple, Dell, HP, and Samsung, sell their products through third-party retailers but also have adopted online channels to conduct retail operations directly [5][6][7][8][9][10][11]. Another example is the fashion apparel industry, in which firms, such as Calvin Klein, Tommy Hilfiger, and Coach, sell through traditional retailers as well as their own direct selling channels [12][13][14][15].…”