Logistics Strategic Decisions

SteadieSeifi, Maryam

doi:10.1016/b978-0-12-385202-1.00003-7

Cited by 2 publications

(1 citation statement)

References 2 publications

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“…Since they are facing challenges to make firms’ profits or market shares as large as possible, the LSPs have to make reasonable decisions in their strategic and operations management under the complex marketing environment, including operational decisions (such as vehicle loading or dispatching, shipment, and warehouse routines), tactical decisions (such as resource planning and transportation planning), strategic decisions (such as the level of investment, the total cost of transportation and storage and service level) (Chen, 2008; SteadieSeifi, 2011; Ghiani et al , 2004; Park and Min, 2017).…”

Section: Introductionmentioning

confidence: 99%

Price and distribution range of logistics service providers considering market competition

Ang

Yang

et al. 2018

APJML

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Purpose The purpose of this paper is to analyze the relationship between market competition and distribution strategy for logistics service providers (LSPs), including freight price, service level (delivery speed), and service coverage. Design/methodology/approach The authors consider two risk-neutral LSPs in which one is an existing company and the other is a new entrant. The existing LSP has a sound distribution network and provides service in both local and remote areas. The new entrant LSP should determine the freight price and service coverage to compete for business. The authors use a Stackelberg game to model the competition between two LSPs with assumptions of consumers’ utility and demand distribution. Numerical examples are used to validate the findings. Findings The findings show that the distribution strategy for LSPs depends on the ratio of the cost difference and shipping speed difference and demand structure. The LSP with higher shipping speeds only need to meet demands in local areas and may stay out of the market in some cases. To compete for business in the whole areas is more profitable for the LSP with lower shipping speeds when either unit service cost or the potential demand in remote areas is low enough. Otherwise, the LSP with lower speeds should stay out the market of remote areas. Originality/value This study is a preliminary research on the relationship between market competition and distribution strategy for LSPs and contributes to service operations management literature and strategic management for LSPs.

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