Inducing Supply Chain Transparency through Supplier Encroachment

By Xu Guan, Baoshan Liu, Ying‐ju Chen, Hong-Wei Wang. Production and operations management, 2019

206 citations recorded by the source corpus.

This study investigates a supplier’s voluntary disclosure strategy when it can encroach on a retailer’s operations by selling directly to final consumers. The establishment of a direct sales channel expands market potential, induces the supplier to adopt a more frequent disclosure strategy, and ultimately leads to a higher level of information transparency in the supply chain. Since more quality information is revealed in the presence of a dual channel, the retailer is able to free ride on the supplier’s disclosure to enhance consumers’ quality expectations. In most cases, such a free‐riding effect is positive and can even create a higher ex ante payoff for the retailer in face of the supplier’s encroachment. Conversely, more transparent product quality information does not necessarily benefit the supplier, who can then no longer hide negative quality information from consumers due to the potential change in the channel structure. Thus, we show that the supplier’s ex ante payoff may become lower with encroachment and that the supplier may commit not to encroach on the retail market, even when it has a free option to open a direct sales channel.

Subfields: Management Information Systems, Management Science and Operations Research, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/d0a23477492d1a6dab41df489c11521a03b33f2b

How researchers see this paper

The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.

In Management Information Systems

1. Yushi Tsunoda
2. Yusuke Zennyo
3. Baoshan Liu
4. Xu Guan
5. Yulan Wang

In Management Science and Operations Research

1. Yushi Tsunoda
2. Yusuke Zennyo
3. Xu Guan
4. Yulan Wang

In Strategy and Management

1. Yushi Tsunoda
2. Baoshan Liu
3. Yusuke Zennyo
4. Xu Guan
5. Yulan Wang

Citations in the corpus

• Platform Information Transparency and Effects on Third‐Party Suppliers and Offline Retailers (2021, background): “By contrast, Guan et al. (2020) investigate information sharing by suppliers.”
• Supplier Encroachment with Multiple Retailers (2021, background): “Guan et al. (2020) show that when the upstream supplier has private information, its encroachment can hurt itself as well.”
• Supplier Encroachment with a Dual‐Purpose Retailer (2021, unknown): “…decisions, such as downstream personalized pricing (Liu and Zhang 2006), collaborative advertising (Zhang et al. 2020), retailer information sharing (Huang et al. 2018), strategic inventories (Guan et al. 2019), quality disclosure (Guan et al. 2020), and production strategies (Niu et al. 2019).”