In the supply chain (SC), the retailer may have private sales cost information and the ability to encroach by introducing a store brand. This study aims to explore how store brand encroachment and information asymmetry affect SC performance.
An SC consisting of one national brand manufacturer and one retailer is considered. Four cases are developed according to the information structure (information symmetry or information asymmetry) and encroachment tactic (encroachment or no encroachment). Then, the equilibrium decisions and profits of the SC members are compared.
Under information symmetry, the manufacturer always favors store brand encroachment. Under information asymmetry, the manufacturer favors store brand encroachment only when the potential market demand is relatively high. Among the four cases, store brand encroachment under information asymmetry is most beneficial for the retailer. Under any information structure, store brand encroachment can achieve Pareto improvement under specific conditions.
This study provides insights into the intricate relationship between store brand encroachment and information structure in SC management.
