To Compete or to Collaborate? Logistics Service Sharing and Retailers' Resale in Competitive Online Channels

Abstract

The prosperity of e-commerce has made more and more businesses willing to enter the e-commerce market, which has also brought a series of strategic collaboration between firms. This study considers game models with and without collaboration between the platform and the retailer. An e-commerce platform has relative logistics service sharing advantages while the retailer has relative procurement advantages. We formulated a multichannel supply chain consisting of a manufacturer and two retailers to explore the feasibility of the above strategic collaboration model. We utilized the Stackelberg game and Nash game approaches to obtain equilibrium solutions under both cooperative and noncooperative scenarios. Through a further analysis, we determined the impacts of the logistics sensitivity, the cost of the unit logistics service effort, the price of shared logistics service per unit, and the price competition intensity on optimal prices, the logistics service efforts, and the profits. Moreover, the collaborative exchange of advantages between the platform and the retailer needs to consider the interests of participating manufacturers in the game. Our extension suggests all three firms should actively promote deeper collaboration.