Online channel configuration strategy considering contract manufacturer encroachment and green investment

Yanting Li, Cuihua Zhang (), Chunyu Li and Yong Ma
Additional contact information
Yanting Li: Northeastern University
Cuihua Zhang: Northeastern University
Chunyu Li: Liaoning University
Yong Ma: Northeastern University

Electronic Commerce Research, 2024, vol. 24, issue 3, No 21, 2065-2112

Abstract: Abstract Increased consumer environmental awareness prompts an original equipment manufacturer (OEM) to work with a green contract manufacturer (CM), where the latter can encroach on the existing market and compete with its OEM by introducing his own-label products. We consider four supply chain scenarios (i.e., NE, ED, EA, and ER) based on the encroachment modes of green CM (i.e., no-encroachment, direct selling, agent selling, and reselling), and explore channel configuration strategies from various perspectives. First, for economic benefit, the CM always encroaches, and entry cost, product substitutability, and agency fee are critical to online channel configuration. The OEM is more reluctant to CM encroachment when two products’ greenness is different. Based on the fact that the agency fee is generally not greater than 0.2, the platform acts as a reseller in most cases. Second, for environmental benefit, both Scenarios ED and EA are likely to be dominant strategies when product greenness is different; otherwise, Scenario ED is always dominant. Finally, consumer surplus can be improved in all encroachment scenarios and consumers prefer Scenario ED in most cases.

Keywords: Encroachment; Green investment; Channel configuration; Outsourcing; Competition and cooperation (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1007/s10660-022-09614-z Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:elcore:v:24:y:2024:i:3:d:10.1007_s10660-022-09614-z

Ordering information: This journal article can be ordered from
http://www.springer.com/journal/10660

DOI: 10.1007/s10660-022-09614-z

Access Statistics for this article

Electronic Commerce Research is currently edited by James Westland

More articles in Electronic Commerce Research from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().