Manufacturer’s decision-making and coordination strategy in an asymmetric multi-channel environment

Abstract

This paper explores the significant impact of e-commerce and investigates manufacturers’ decision-making processes regarding the opening of e-shops and the adoption of online and offline coordination strategies to enhance profits in an e-commerce environment. A novel three-channel model with asymmetric retailers is proposed, and three scenarios are analyzed: the initial dual-channel scenario, the multi-channel scenario with e-platform, and the “Order online, Pickup offline” coordinated scenario. By comparing optimal profits across these scenarios, decision-making inequalities for manufacturers are derived. Subsequently, numerical experiments validate that manufacturers, aiming to maximize profits, opt to establish an e-commerce channel and coordinate with offline retailers. Additionally, the study emphasizes the importance of e-platforms in setting commission rates to drive increased profits. The findings offer practical implications for manufacturers to engage in interest-balanced coordination, enabling them to adapt to evolving retail dynamics in the advancing e-commerce landscape from both theoretical and practical perspectives.