Selling vertically differentiated products under one channel or two? A quality segmentation model for differentiated distribution channels

Many manufacturers, including Lenovo, Sony, Procter & Gamble, and Buckle, have adopted differentiated distribution channels to market vertically differentiated products. However, there is scant literature addressing the issue of quality differentiation in the presence of differentiated distribution channel policies. To fill this void, we examine whether (how) differentiated channel policies affect manufacturers’ quality differentiation and all parties’ performance. Specifically, we consider a manufacturer who produces two vertically differentiated products (high- and low-tier ) together, but withtwo marketing options: (1) distributing both products through one retailer (Model O, One-channel policy), or (2) providing high-quality products through one channel but low-tier products through another (Model T, Two-channel policy). Our results show that the manufacturer is more likely to decrease the level of quality differentiation in Model T than in Model O. Moreover, contrary to popular belief, we show that “quality distortion” is not limited to low-tier products but can occur with high-tier products. Among other results, we find that the one-channel policy benefits the retailer but hurts both the manufacturer and the total supply chain. To test the robustness of the results, we also comment on how the additional horizontal consumer heterogeneity affects our results and the implications of the competition at the manufacturer level

Agency Theory and Supply Chain Management: Goals and Incentives in Supply Chain Organisations

Purpose Agency theory (AT) offers opportunities to examine how the risk of opportunism can be prevented or minimised along supply chain organisations using incentives to achieve goal alignment. Methodology The study presents evidence of how members of such organisations achieve goal alignment through the use of incentives by empirically examining two complete supply chain organisations, including final customers, within the UK agri-food industry using a case study methodology. Findings The findings show that contractual goals can be divided into two different categories, shared supply chain organisational goals, and independent goals of each individual participant. In addition to monitoring ability, incentives can also be classified into short term financial and long term social incentives. Product attributes, in particular credence attributes, are also identified as having implications for both goals and incentives. Research limitations The supply chain perspective and case study methodology mean that the research findings cannot be generalised to other supply chains. A further limitation of the research is the use of different methods of data collection at the final customer point. Practical Implications Managers must ensure that appropriate incentives for all departments and individuals are designed to deliver the strategic goals of the supply chain organisation

What Does the Rise of China Do for Industrialisation in Sub-Saharan Africa?

China's rapid growth and deepening global presence in Africa creates a major challenge for the conventional wisdom of industrialisation as a core component of development strategy. These challenges are expressed through a combination of direct impacts (expressed in bilateral country-to-country relations) and indirect impacts (reflected in competition in third country markets). In current structures, these impacts are predominantly harmful for SSA's industrial growth, as expressed through its recent experience in the exports of clothing to the US under AGOA (African Growth & Opportunity Act). If Washington Consensus policies prevail, these harmful impacts will be sustained and deepened

Structural and Pricing Decisions in Manufacturing/Remanufacturing Systems with Vertically Differentiated Products

This research encompasses three related papers to address some of the influencing factors in structural and pricing decisions in supply chains with manufacturing and remanufactunng. We consider new and remanufactured products that are vertically differentiated, that is, the consumers perceive the remanufactured product as of a lower quality and thus they are not willing to pay for them as much as they would for the new product. Examples of such products are seen in computer systems, automotive parts and office equipment. In the first paper, we consider a closed loop supply chain that includes a manufacturer, a remanufacturer and a retailer. We investigate the pricing decisions for the new and remanufactured products under different coordination structures between members of the chain while taking into account the consumers’ perception of the remanufactured product versus new and the quality of returns as two major parameters. In addition, we find which coordination structure is a better option for the closed loop supply chain members. Particularly, we find that although a lower price is charged for the new product when the retailer and the remanufacturer are coordinated (RREMC) compared to the completely decentralized (CD) structure, a higher number of new products are sold in the completely decentralized structure. A similar result is found for the remanufactured product when comparing the CD structure with the one in which the retailer and manufacturer are coordinated (MRC). We also find that MRC results in the highest total profit while RREMC results in the lowest. In the second paper, we analyze the pricing decisions for a firm that produces both new and remanufactured products and also collects the used product returns (known as cores, which are used in remanufacturing). The firm needs to define the core acquisition price as well as the selling prices for both new and remanufactured products. In our models, we capture the quality of returns (by assuming a stochastic collection yield rate) and the competition between new and remanufactured products, and show how they influence the optimal expected prices and profit of the firm. We provide managerial insight on how varying the optimal prices could help the firm optimally accommodate for different conditions (i.e. with respect to changes in the consumers’ perceptions of the products, the yield rate, and the salvage value of the cores). For example, we find that when the firm sells low margin products, a small change in the consumers’ perception of the remanufactured products versus new could increase the firm’s expected profit by more than 10%. Finally, in the third paper, we consider two core collection structures for a firm that produces both new and remanufactured products. In the first structure (known as the centralized channel), the firm collects the cores directly from the consumers, while in the second structure (known as the decentralized channel), the firm uses a third-party collector to take care of the core acquisition We assume that the demands for new and remanufactured products are influenced by the product prices and also by a stochastic component. We jointly find the optimal prices and lot sizes for each product and investigate the impact of the competition between products (i.e. consumers’ perception of the remanufactured product versus new), the quality of returns (i.e. the collection yield rate) and the demand uncertainties on the optimal solution in each channel. Furthermore, we compare the channels on the amount of change in their optimal values and expected profits with respect to changes in the parameters We also provide managerial insight on how the firm should change the optimal prices and lot sizes in each channel considering possible changes in the consumers’ perception of the products, the collection yield rate and the demand uncertainties. For example, we find that when the demand uncertainties for the new and remanufactured products are higher, the reduction in the firm’s profit is about 2-3% less in the centralized channel compared to the decentralized one

Tourism supply chain management : a new research agenda

2008-2009 > Academic research: refereed > Publication in refereed journalAccepted ManuscriptPublishe

Business model optimization plan for S.F. Group's fresh e-commerce business

Nowadays, the market is increasingly fierce, so many companies seek new growth points through business diversification. However, logistics companies have not succeeded in integrating business in the e-commerce industry. In order to answer the failure of logistics enterprises in the field of E-commerce, this paper chooses S.F. BEST as the research object. Case study is conducted on JD.com FRESH and MISSHFRESH to explore their successful experience in business model and the diversity of the industry. After that, we proposed feasible suggestions on the problems existing in S.F. Group. The study of this project found that fresh e-commerce not only needs to provide customers with quality products and delivery services but also needs to establish a good relationship with customers through platforms and channels. However, S.F. Group lacked the ability of platform and channel management, and its market positioning was obviously wrong, so it suffered from business failure and financial losses. Aiming at the shortcomings of S.F. Group's business model in market positioning accuracy and resource utilisation ability, this project proposes improvement suggestions and a development plan. By improving the implementation of the plan, we hope to help S.F. Group reshapes its business model and business operation process, and help the company achieve business diversification and vertical integration.Na actualidade, o mercado está cada vez mais feroz, levando a que muitas empresas procurem novas vias de crescimento através da diversificação dos negócios. No entanto, as companhias de logística não conseguiram desenvolver os seus negócios no sector de comércio electrónico. A fim de dar conta do fracasso das referidas companhias no domínio do comércio electrónico, o presente trabalho tem o S.F. BEST como objecto de investigação. O estudo de caso é conduzido para explorar a experiência bem-sucedida do modelo de negócios e a diversidade do setor. Em seguida, propusemos sugestões viáveis sobre os problemas existentes no S.F. Grupo. O estudo do presente trabalho constatou que o comércio electrónico actual não apenas necessita de oferecer aos clientes produtos de qualidade elevada e prestar serviços de entrega eficaz, mas também precisa de estabelecer um bom relacionamento com os clientes através de várias plataformas e canais. No entanto, o S.F. Grupo não possuía a capacidade de gestão de plataforma e canal, com um posicionamento obviamente errado no mercado, por consequência, sofreu de fracasso nos negócios e perdas financeiras. O presente trabalho propõe sugestões de melhoria e um plano de desenvolvimento, focando nas deficiências do modelo de negócios do S.F. Grupo de negócios acerca da imprecisão de posicionamento no mercado e incapacidade de utilização de recursos. Através de melhorar a implementação do plano, esperamos ajudar o S.F. Grupo na reestruturação do modelo de negócios e do processo de operação de negócios, ajuda a empresa a alcançar a diversificação de negócios e integração vertical