Research on retailer’s store brand introduction and information sharing strategies under uncertain demand

Purpose This study systematically aims to investigate the interplay between store brand (SB) introduction and demand information sharing strategies under uncertain market conditions. By analyzing these two critical factors together, we aim to address their impact on the equilibrium decisions and profits of supply chain members. Design/methodology/approach Using a game-theoretic approach, we develop a multi-stage model to analyze the retailer’s decision-making process across four distinct scenarios: (1) absence of SB introduction and no information sharing, (2) absence of SB introduction with information sharing, (3) presence of SB introduction and no information sharing and (4) presence of SB introduction with information sharing. The model captures the stochastic nature of market demand, incorporates cost coefficients and accounts for quality differentiation between store brands and national brands. Findings The findings reveal that the coexistence of national and store brands is viable only when the production cost coefficient falls within a moderate range. A low-cost coefficient may force the manufacturer to exit due to the “quality squeeze-out” effect, wherein the SB’s superior value proposition undermines the NB’s competitiveness. Conversely, a high-cost coefficient may result in manufacturer exit owing to the “cost squeeze-out” effect, where production costs render the NB unprofitable. Introducing an SB enhances the retailer’s profit but diminishes the manufacturer’s, although the retailer’s gain outweighs the manufacturer’s loss, leading to an overall increase in supply chain profitability. Without SB introduction, demand information sharing reduces both the retailer’s and the supply chain’s profits while increasing the manufacturer’s profit. However, when an SB is introduced and the cost coefficient is low, sharing demand information further boosts the retailer’s profit. Originality/value This study offers a unique contribution by examining the interaction between SB introduction and demand information sharing under uncertain market conditions. Unlike previous research, which often considers these factors in isolation, our work explores their mutual influence and impacts on supply chain outcomes. We provide a novel perspective on how cost coefficients shape strategic decisions, identifying conditions under which SB introduction and information sharing benefit retailers or disadvantage manufacturers. Furthermore, our model delivers practical insights into supply chain profitability by addressing the dual effects of quality and cost squeeze-out.