Interaction between service investment and store-brand introduction in a dual-channel supply chain

This study examines service investment decisions in the context of two store brand introduction modes and the mode selection of a retailer.The research focuses on a supply chain comprised of a national brand manufacturer(NBM),an external store brand supplier(SBS),and a retailer.A national brand product(NB)is distributed to the market through both direct and retail channels.The retailer consistently offers service efforts within the retail channel and has two options for launching a store brand product(SB):producing the SB or procuring it from an external source.The findings indicate that,when the retailer has a low fixed cost and a substantial market size for one-stop consumers,the retailer internally producing its own SB is more profitable.However,when the market size for one-stop consumers and the fixed cost of producing the SB are both low,or when the retailer possesses a relatively high fixed cost,it is advisable for the retailer to procure a lower-quality SB from the SBS.Alternatively,the retailer could establish its own production facilities to launch a higher-quality SB.Furthermore,it is noteworthy that the NBM consistently favors the retailer outsourcing the SB production to an external SBS.This implies that both the NBM and the retailer can achieve a“win-win”outcome when the retailer procures the SB.