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| Research on Retailer’s Strategy of Introducing Store Brand under Cross-Shareholding |
| XIAO Lei，WANG Enming，SUN Kangtai，GUAN Xu |
| 1. Hubei University, Wuhan, China;2. Hubei University of Economics, Wuhan, China;3. Huazhong University of Science and Technology, Wuhan, China |
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Abstract Consider a two-tier supply chain system consisting of a manufacturer and a retailer, where both entities hold mutual stakes and poss profit-sharing rights, while the retailer also has the capability to introduce store brand. We construct a manufacturer-dominant Stackelberg game model to explore the optimal decisions made by supply chain members in two scenarios: with or without the introduction of the retailer’s store brand, and further provide the optimal brand introduction strategy for the retailer. The research findings indicate that the retailer will only introduce the store brand when the fixed cost is low. An increase in the retailer’s ownership stake stimulates the introduction of its store brand, but the manufacturer’s ownership stake inhibits the retailer from introducing store brand. The store brand may not harm the manufacturer, especially when market competition is intense and fixed costs are low. Finally, the store brand may not only increase consumer surplus and enhance social welfare, but also lead to a win-win situation for both the manufacturer and the retailer.
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Received: 05 September 2023
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