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| Influences of Cross-Shareholdings in Supply Chain on the Decision of Manufacturer’s Direct Channel |
| HE Lihong，HUANG Ganquan，ZHANG Zhewei |
| Lanzhou University, Lanzhou, China |
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Abstract In the case of the cross-shareholdings of a retailer and a supplier in supply chain, this paper suggests the criteria for the manufacturer on when to open direct channel by comparing the re-distributed profits of the manufacturer and retailer before and after the dual-channel being opened. And the influences of the cross-shareholdings on the willingness of manufacturer to launch direct channel as well as their optimal decision-making under both single-channel and dual-channel scenarios are further explored. The results show that when the manufacturer holds a large share of the retailer, the manufacturer’s willingness to open direct channel is small, or even reluctant to open direct channel. Meanwhile, the retailer does not want the manufacturer to open direct channel. When the retailer holds a large share of the manufacturer, the willingness of manufacturer to open direct channel is also small, but the retailer is more likely to want manufacturer to open direct channel. In both single-channel and dual-channel scenarios, the increase of proportion of cross-shareholdings of one member in a supply chain will lead to the increase of the net profit of another one in supply chain. Thus, through the redistribution of profits, its own final profit increases and leads to another one’s decrease.
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Received: 03 January 2018
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