Market segmentation and pricing strategies based on product platform

2017 ◽  
Vol 29 (1) ◽  
pp. 183-199 ◽  
Author(s):  
Qin Su ◽  
Weiyan Liu
Keyword(s):  
Supply Chain ◽  
Market Share ◽  
Market Segmentation ◽  
Product Line ◽  
The Other ◽  
Product Architecture ◽  
Product Platform ◽  
Pricing Strategies ◽  
Content Type ◽  
Substitutable Products

Purpose The purpose of this paper is to examine the issue of optimal pricing strategies for two substitutable products from the same product platform and the effects of variations in product architecture. Design/methodology/approach The authors design a product line which consists of two substitutable products and use a traditional market segmentation research framework to analyze the pricing and product design strategies. Findings It is concluded that profit tends to rise in a centralized supply chain at the expense of market share of the integral product. In a decentralized supply chain, one product will reduce its market share so as to enhance the degree of modularity. Although enhancing the extent of integration of a product will bring in more flexibility during the design of the product line, this will do so at the expense of the market share of the other product. Originality/value The authors find that the two products form a product line and share a common module belonging to the platform, so any changes in the modules (changes in product architecture) not only affect the product in question but also the other one in the product line.

scholarly journals Joint optimal decisions on pricing and warranty policy of duopoly supply chain with one common retailer

2020 ◽  
Vol 30 (2) ◽  
pp. 209-236
Author(s):  
Soumita Kundu ◽  
Tripti Chakrabarti
Keyword(s):  
Supply Chain ◽  
Market Share ◽  
Competitive Strategy ◽  
Decision Makers ◽  
The Other ◽  
Decision Strategies ◽  
Optimal Decisions ◽  
Cooperative Strategies ◽  
Substitutable Products ◽  
Profit Functions

Early researches related to the interaction between manufactures for complementary products, mainly considered price as only the dimension of competition. With the increasing competition in capturing the market share, manufactures cannot compete by only lowering prices. In this paper, we assume that besides the price, the manufactures choose warranty as the competitive strategy of two different but substitutable products in a duopoly supply chain with one common retailer. Furthermore, two cases are considered (i) only one manufacturer adopts warranty policy as a competitive strategy against the other, (ii) both manufacturers offer warranty on their product, to study under which situation offering a warranty becomes more profitable for a manufacturer while the other competitive manufacturer has already adopted warranty policy. The profit functions of the manufacturers and the retailer are then maximized under manufacturers' cooperative and non-cooperative strategies. We then compare the scenarios under different decision strategies numerically, which gives some insights on changes of key parameters to help the decision makers to capture the market.

A hub location model in the sustainable supply chain considering customer segmentation

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Ali Heidari ◽  
Din Mohammad Imani ◽  
Mohammad Khalilzadeh
Keyword(s):  
Supply Chain ◽  
Customer Segmentation ◽  
The Other ◽  
Supply Chain Network ◽  
Meaningful Difference ◽  
Sustainable Supply Chain ◽  
Hub Location ◽  
Nsga Ii ◽  
Content Type ◽  
Multi Objective

Purpose This paper aims to study the hub transportation system in supply chain networks which would contribute to reducing costs and environmental pollution, as well as to economic development and social responsibility. As not all customers tend to buy green products, several customer groups should be considered in terms of need type. Design/methodology/approach In this paper, a multi-objective hub location problem is developed for designing a sustainable supply chain network based on customer segmentation. It deals with the aspects of economic (cost reduction), environment (minimizing greenhouse gas emissions by the transport sector) and social responsibility (creating employment and community development). The epsilon-constraint method and augmented epsilon-constraint (AEC) method are used to solve the small-sized instances of this multi-objective problem. Due to the non-deterministic polynomial-time hardness of this problem, two non-dominated sorting genetic algorithm-II (NSGA-II) and multi-objective grey wolf optimizer (MOGWO) metaheuristic algorithms are also applied to tackle the large-sized instances of this problem. Findings As expected, the AEC method is able to provide better Pareto solutions according to the goals of the decision-makers. The Taguchi method was used for setting the parameters of the two metaheuristic algorithms. Considering the meaningful difference, the MOGWO algorithm outperforms the NSGA-II algorithm according to the rate of achievement to two objectives simultaneously and the spread of non-dominance solutions indexes. Regarding the other indexes, there was no meaningful difference between the performance of the two algorithms. Practical implications The model of this research provides a comprehensive solution for supply chain companies that want to achieve a rational balance between the three aspects of sustainability. Originality/value The importance of considering customer diversity on the one hand and saving on hub transportation costs, on the other hand, triggered us to propose a hub location model for designing a sustainable supply chain network based on customer segmentation.

scholarly journals Supply chain strategy in the luxury fashion industry: impacts on performance indicators

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Bianca Bindi ◽  
Romeo Bandinelli ◽  
Virginia Fani ◽  
Margherita Emma Paola Pero
Keyword(s):  
Supply Chain ◽  
Performance Indicators ◽  
Distribution Channel ◽  
Product Line ◽  
Fashion Industry ◽  
Primary Case ◽  
Close Link ◽  
Content Type ◽  
Supply Chain Strategy

PurposeThe purpose of this paper was to investigate what types of supply chain strategies (SCS) are implemented within luxury fashion companies, according to the drivers that regulate competitiveness in this sector (brand positioning, distribution channel, type and line of product). Moreover, the objective was to define which key performance indicators (KPIs) should be measured according to the chosen strategy, and finally to evaluate the alignment of luxury fashion companies with the proposed indicators.Design/methodology/approachThe literature review was the first step performed. Thereafter, a case study was conducted and the sample, composed of six companies, was selected, a questionnaire was then developed to guide the interviews, after which the data were collected. From the data, a primary case analysis was conducted, from which cross-case patterns were also researched.FindingsFrom the results obtained, it was possible to state that companies involved in the case study adopted different SCS within the same company according to the drivers that regulate the sector competitiveness. As a result, the product line was shown to be the only driver that affected both the alignment between the expected and implemented SCS, respectively, and the alignment with the selected KPIs.Originality/valueThe paper provides valuable insights to companies that are trying to align SCS and KPIs. The close link between these aspects had not yet been explored previously. In particular, there were no indications about the KPIs that have to be measured for a specific SCS.

Coordination through cooperative advertising in a two-period supply chain with retail competition

Kybernetes ◽  
2019 ◽  
Vol 48 (6) ◽  
pp. 1175-1194 ◽  
Author(s):  
Qingyun Xu ◽  
Bing Xu ◽  
Qiushi Bo ◽  
Yi He
Keyword(s):  
Supply Chain ◽  
Supply Chain Coordination ◽  
The Other ◽  
Decision Variable ◽  
Cooperative Advertising ◽  
Fashion Industry ◽  
Retail Competition ◽  
Product Price ◽  
Content Type ◽  
Advertising Strategy

Purpose Most firms in the fashion industry frequently design and promote new products, which leads to a two-period phenomenon in product sales. This study aims to examine the optimal advertising efforts of each channel member and the subsidy strategies of the manufacturer with retail competition in a two-period supply chain. Design/methodology/approach By utilizing the game theory, this study developed a cooperative advertising model that considers the element of retailer competition in a two-period supply chain. Findings The main results of this study are as follows. An increase in the subsidy rate of one retailer’s advertising cost will lead to a decrease in the share of the other. When a manufacturer’s marginal profit from one retailer is considerably larger than that from the other, the manufacturer will share more advertising cost with the former. This study demonstrates that a bilateral participation contract can achieve supply chain coordination and increases the likelihood of retailers to participate in this contract when competition effect is small. Research limitations/implications First, product price is not a decision variable in this model. This concern can be studied in future work. Second, the one-manufacturer and two-retailer supply chain can be expanded to competitive manufacturers. Practical implications This study provides some decision references for the manufacturer and retailer on advertising strategies. The manufacturer can also gain insights into cooperative advertising strategy when facing a competitive retail environment. Originality/value Most previous studies related to cooperative advertising focused on a single-period supply chain. This study investigates cooperative advertising strategy with retail competition in two-period sales and explores the potential coordinating power of a bilateral participation contract.

Logistics principles vs. legal principles: frictions and challenges

2014 ◽  
Vol 44 (10) ◽  
pp. 744-767 ◽  
Author(s):  
Andreas Norrman ◽  
Oskar Henkow
Keyword(s):  
Supply Chain ◽  
Comparative Analysis ◽  
Supply Chain Management ◽  
Design Methodology ◽  
Functional Approach ◽  
The Other ◽  
Chain Management ◽  
Content Type ◽  
Legal Principles ◽  
Practical Implications

Purpose – Logisticians propose changes to improve supply chains, and legal practitioners do likewise, but from a different perspective. Proposals from one domain increasingly have an impact on the other due to e.g. globalization – but cross-disciplinary knowledge often seems limited. The purpose of this paper is to facilitate interaction between the domains by increasing the level of joint understanding of the principles used in each domain, and to look at the potential frictions and challenges. Design/methodology/approach – Management principles for efficient logistics and supply chain management as well as key principles governing the legal systems are summarized on both a paradigmatic and an action level. Illustrations from practice are presented. These have been obtained by a cross-functional team which has interviewed both logisticians and lawyers. Findings are based on cross-functional comparative analysis of principles and illustrations. Findings – Frictions between operational principles were found to exist in each domain, with some principles harder to reconcile than others. There are also challenges between the two paradigms of logistics and law that influence the operational principles. Research limitations/implications – One implication is that the knowledge gap, challenges and frictions between the professions and domains, both in practice and academia, would benefit from more research. Practical implications – Although it may seem trivial, logisticians and lawyers need to cooperate better. The research shows on a fundamental level, with practical examples, the challenges and frictions that occur. Originality/value – The cross-functional approach with law, and the discussion and comparison of principles.

ISO 9000 moderation role over supply chain alignment in manufacturing context

2016 ◽  
Vol 27 (3) ◽  
pp. 338-363 ◽  
Author(s):  
Mohamed El Mokadem
Keyword(s):  
Supply Chain ◽  
Supplier Selection ◽  
Selection Criteria ◽  
Iso 9000 ◽  
Small Sample ◽  
The Other ◽  
Sufficient Evidence ◽  
Content Type ◽  
Moderation Effect ◽  
Research Findings

Purpose – The purpose of this paper is to investigate the extent to which International Standardization Organization (ISO) 9000 implementation is associated with better alignment of supply chain activities. Design/methodology/approach – This research hypothesized the moderation effect of ISO 9000 over the alignment between customer priorities from one side and supplier selection criteria priorities from the other side. Collected survey data were analyzed using cluster analysis. Then, moderated regression analysis using ordinary least squares was employed to test the study hypotheses. Findings – Advanced ISO 9000 implementation moderates the relation between customer priorities and the prioritization of supplier selection criteria with respect to priorities of cost management, total cost of ownership and product flexibility. While, there was no sufficient evidence to the same effect with respect to priorities of logistical flexibility and delivery. Research limitations/implications – This research presents a new perspective for researchers to study the extended benefits of ISO 9000 implementation and its moderating effect over supply chain relations. However, the small sample size might limit the ability to generalize the research findings. Further research is required to confirm the research findings using wider sample. Practical implications – This research provides practitioners with a path to acknowledge the role of ISO 9000 as a business practice that helps organizations to align their supply chain activities. Originality/value – This paper contributes to knowledge by proposing the moderation effect of ISO 9000 implementation on the alignment between customer priorities from one side and the emphasis that organization place on the same priorities while selecting suppliers from the other side.

Impact of bargaining power on supply chain profit allocation: a game-theoretic study

2019 ◽  
Vol 16 (3) ◽  
pp. 398-416
Author(s):  
Sanjay Prasad ◽  
Ravi Shankar ◽  
Sreejit Roy
Keyword(s):  
Supply Chain ◽  
Bargaining Power ◽  
Supply Chain Coordination ◽  
Infinite Horizon ◽  
The Other ◽  
Future Research ◽  
Theoretic Approach ◽  
Content Type ◽  
Bargaining Position ◽  
The Impact

Purpose The purpose of this paper is to study the impact of bargaining powers of firms in supply chain coordination. It studies selected aspects of bargaining powers, namely, impatience, breakdown probability and outside options, and uses a bargaining-theoretic approach to analyze surplus allocation in a coordinated supply chain. Design/methodology/approach This paper proposes one-supplier one-buyer infinite horizon supply chain coordination game, where suppliers and buyers negotiate for the allocation of supply chain surplus arising out of supply chain coordination. Various aspects of the bargaining power of the negotiating parties are modeled and the paper studies impact of power levels on the results of the bargaining game. Findings A significance of impatience on the bargaining process and the surplus split has been established. This paper also demonstrates a rather counter-intuitive aspect of bargaining that the impatience (as perceived by the other party) can improve the bargaining position and therefore share of profits. Research limitations/implications This paper has limited its analysis to three key components of bargaining power. Future works can study other aspects of bargaining power, namely information asymmetry, learning curve, inside options, etc. Further, the paper has considered an infinite horizon model – this assumption can be relaxed in future research. Practical implications Equations to derive optimal split of the surplus have been derived and can be leveraged to design an autonomous bargaining agent to discover equilibrium profit splits in a cloud or e-commerce setting. Further, insights from this paper can be leveraged by managers to understand their relative bargaining power and drive to obtain the best profit split. Originality/value This paper establishes that impatience (in terms of counter-offer probability) has a significant impact on the bargaining position and on the split of the surplus that the firm can get for themselves. It establishes the advantage of higher levels of impatience, provided the other party recognizes the impatience and factors it in their decision-making process.

The impact of firms’ social ties with customers on dual-channel supply chains

2019 ◽  
Vol 38 (6) ◽  
pp. 777-796
Author(s):  
Wei Wei ◽  
Shue Mei ◽  
Jiameng Yang ◽  
Zhiyong John Liu
Keyword(s):  
Social Media ◽  
Supply Chain ◽  
Social Ties ◽  
Wholesale Price ◽  
Information Service ◽  
Distribution Channel ◽  
Retail Price ◽  
The Other ◽  
Content Type ◽  
Dual Channel

Purpose More and more firms are utilizing social media as a distribution channel to sell products. By establishing business accounts on social media firms provide information service to strengthen their relationship with customers and boost sales. The purpose of this paper is to investigate the pricing, information service provision and channel strategies of firms who sell products through social media. Design/methodology/approach The authors use a game theoretical model to study a dual-channel supply chain consisting of one manufacturer and one retailer. Two scenarios are considered – under one scenario the manufacturer and under the other the retailer, respectively, solely provides information service. Both firms’ pricing decisions and profits are compared. Findings The authors find that in the dual-channel model with either the manufacturer or the retailer providing information service to enhance the demand: a firm that has stronger social ties with customers is willing to provide more information services; when the manufacturer provides information service, it charges a direct price higher than the wholesale price, and whether the direct-channel price exceeds the retail price depends on the strength of the manufacturer’s social ties with customers; when the retailer provides information service, the direct price is equal to the wholesale price, both lower than the retail price; and a firm always prefers itself rather than the other firm to provide information service. However, the whole supply chain is better off if the manufacturer rather than the retailer provides information service. Research limitations/implications Besides the relationship between firms and customers, the peer relationship among customers also impacts the supply chain performance, which might be studied in the future. Originality/value The study is novel in theoretically exploring the influence of firms’ social relationship with customers on firms’ pricing and channel strategies.

The impact of corporate distress along the supply chain: evidences from United States

2019 ◽  
Vol 24 (4) ◽  
pp. 498-508 ◽  
Author(s):  
Lucia Gibilaro ◽  
Gianluca Mattarocci
Keyword(s):  
Supply Chain ◽  
Trade Credit ◽  
The Other ◽  
Credit Policy ◽  
Growth Opportunities ◽  
Supply Chain Disruption ◽  
Content Type ◽  
Performance Risk ◽  
The Impact ◽  
Corporate Distress

PurposeThe aim of the study is to provide evidence on the distress in the supply chain and its impact on the trade credit policy, firms’ performance and risk and their growth opportunities. Trade credit creates a strict relation between suppliers and customers that cannot be easily substituted over time. The linkages established between firms in a supply chain are a key value added for all members that could represent a competitive advantage over independent market players. In the event of a supply chain disruption, all members could suffer from a decrease in profitability and an increase in risk. Nonetheless, no empirical evidence exists on the expected economic and financial effects on pertinent suppliers and customers.Design/methodology/approachThis paper examines the US market and evaluates the impact of a supply chain member’s default on the other members, looking at both the customers’ and suppliers’ default. The sample considers all firms in the USA disclosing entry into bankruptcy proceedings through EDGAR filings that were not classified as financial intermediaries between 2012 and 2016. The analysis considers the effect of distress on the supply chain (suppliers or customers) on the trade credit policy, performance, risk and growth perspectives of connected firms.FindingsThe results show that a supply chain disruption not only modifies the trade credit policy but also affects firm risk and profitability and the financing sources available to support firm growth. Empirical evidence shows that the bankruptcy of a member of the supply chain affects the trade credit policy of all the other members. The costs related to default are economically and financially relevant to all supply chain members and affect the resiliency of the supply chain beyond the short term.Originality/valueThis paper uses an original and innovative database to empirically test the impact of corporate distress on supply chain financing, performance, risk and growth opportunities.

Product architecture and supply chain design: a systematic review and research agenda

2015 ◽  
Vol 20 (1) ◽  
pp. 98-112 ◽  
Author(s):  
Sebastian Pashaei ◽  
Jan Olhager
Keyword(s):  
Supply Chain ◽  
Research Agenda ◽  
Search Strategy ◽  
Supply Chain Design ◽  
Product Architecture ◽  
Future Research ◽  
Supplier Relationships ◽  
Content Type ◽  
Focal Firm ◽  
Key Dimensions

Purpose – The purpose of this paper is to systematically review the extant literature on the relationship between product architectures and supply chain design to identify gaps in the literature and identify future research opportunities. Design/methodology/approach – This paper examines the peer-reviewed literature on product architectures and supply chain written in English. The search strategy is based on selected databases and keywords. In total, 56 articles from 1995 to 2013 were identified. Findings – Three key dimensions are identified for the categorization of the literature: the type of product architecture, the type of supply chain and the research methodology. Furthermore, we identify themes related to outsourcing, supplier selection, supplier relationships, distance from focal firm and alignment. Research limitations/implications – The present search strategy may have missed some references that are related to the area. However, as a counter-measure, we used back-tracking and forward-tracking to identify additional relevant papers. A research agenda is proposed for further research on the interaction of product architectures and supply chain design. Originality/value – This paper is, to the best of the authors’ knowledge, the first broad review that investigates the interrelationship between product architectures and supply chain design.

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