The analysis of performance in one single and dual channels

Suppliers routinely decide whether to distribute their products through one single channel or dual channels. Conventional wisdom says that dual distribution channels outperform one single channel based on the whole supply chain's performance in the capacity and the supplier's profit. However, this paper finds that the channel structure in the distribution plays an important role in these performances. The results show that at least one of the dual channels should be centralised in order to outperform the single centralised channel and two decentralised channels always do better than one single decentralised channel.

[1]  Sunil Gupta,et al.  Note on Self-Restraint as an Online Entry-Deterrence Strategy , 2006, Manag. Sci..

[2]  V. Kasturi Rangan,et al.  Channel Selection for New Industrial Products: A Framework, Method, and Application , 1992 .

[3]  Florian Zettelmeyer,et al.  Expanding to the Internet: Pricing and Communications Strategies When Firms Compete on Multiple Channels , 2000 .

[4]  Jan B. Heide,et al.  Understanding Dual Distribution: The Case of Reps and House Accounts , 1995 .

[5]  Sridhar R. Tayur,et al.  Special Issue: OR/MS and E-Business: Quantitative Analysis for Internet-Enabled Supply Chains , 2001, Interfaces.

[6]  Zhaoqiong Qin,et al.  Towards integration: a revenue-sharing contract in a supply chain , 2007 .

[7]  A. Tsay,et al.  Channel Conflict and Coordination in the E‐Commerce Age , 2004 .

[8]  L. Preston,et al.  Dual Distribution and its Impact on Marketing Organization , 1965 .

[9]  Anil Arya,et al.  The Make-or-Buy Decision in the Presence of a Rival: Strategic Outsourcing to a Common Supplier , 2008, Manag. Sci..

[10]  Ruth C. King,et al.  Impact of Web−based E−Commerce on Channel Strategy , 2002 .

[11]  Wei-yu Kevin Chiang,et al.  Production, Manufacturing and Logistics Managing inventories in a two-echelon dual-channel supply chain , 2005 .

[12]  X. Vives,et al.  Price and quantity competition in a differentiated duopoly , 1984 .

[13]  Tamer Boyacı,et al.  Competitive stocking and coordination in a multiple-channel distribution system , 2005 .

[14]  R. T. Moriarty,et al.  Managing hybrid marketing systems. , 1990, Harvard business review.

[15]  G. Day,et al.  Strategic Channel Design , 1997 .

[16]  Jayashankar M. Swaminathan,et al.  Coordinating Traditional and Internet Supply Chains , 2004 .

[17]  Dilip Chhajed,et al.  Direct Marketing, Indirect Profits: A Strategic Analysis of Dual - Channel Supply - Chain Design , 2003, Manag. Sci..

[18]  Steven M. Shugan,et al.  Managing Channel Profits , 2008, Mark. Sci..

[19]  Nancy Gallini,et al.  Dual Distribution and Royalty Fees in Franchising , 1992 .

[20]  Wujin Chu,et al.  Controlling product returns in direct marketing , 1996 .