Effect of a platform's private brand on the manufacturer's dual-channel management strategies

This study considered a supply chain composed of a platform that sells a private brand and a manufacturer that distributes products through both the direct channel and the platform channel. We first determined the manufacturer's optimal multichannel strategies under the reselling mode and agency mode. Then, we investigated the effect of competition intensity and operational cost on the manufacturer's and platform's decisions and profits. The analysis revealed that owning multichannel operations can empower a manufacturer to flexibly redesign its profit source. An unexpected result was that under the reselling mode, the manufacturer does not always benefit from the more efficient operation of the direct channel. Moreover, we obtained the interesting finding that when adopting the agency mode, the platform's profit increases as its rival operates the direct channel more efficiently, thus achieving a win-win situation. The main results were found to hold qualitatively in the extension.