Can a weak retailer benefit from manufacturer-dominant retailer alliance?

Nawel Amrouche and Ruiliang Yan

Journal of Retailing and Consumer Services, 2013, vol. 20, issue 1, 34-42

Abstract: The paper provides a framework to help the weak retailer delineate the circumstances that allow him to benefit from an alliance between the dominant retailer and the common manufacturer. We use a game-theoretic model to determine the optimal pricing and service strategies when channel members act independently then when the dominant retailer forms an alliance with the manufacturer. We find that: (i) the alliance is formed only if the market is not strongly competitive in terms of price, (ii) differentiation in terms of price and service is beneficial to all channel members under alliance, (iii) an interaction between spillover and service effects plays a crucial role to make the weak retailer gain or lose from the alliance.

Keywords: Pricing strategies; Service strategies; Business-to-Business; Supply chain management; Game theory; Strategic alliance (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:joreco:v:20:y:2013:i:1:p:34-42

DOI: 10.1016/j.jretconser.2012.10.002

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