IDEAS home Printed from https://ideas.repec.org/a/eee/proeco/v258y2023ics0925527323000233.html
   My bibliography  Save this article

The role of blockchain technology in the dual-channel supply chain dominated by a brand owner

Author

Listed:
  • Zhu, Shichao
  • Li, Jian
  • Wang, Shouyang
  • Xia, Yusen
  • Wang, Yajing

Abstract

Counterfeit and low-quality products pose huge challenges to brand owners. Consumer trust in brands requires facilitation from product information disclosure. A traceability system enabled by blockchain technology (BCT) presents one of the most promising solutions to these issues and contributes to two effects: total market potential improvement (TMPI) effect and market share adjustment (MSA) effect. As an initial attempt to consider the impacts of BCT on market share, we focus on whether the powerful brand owner in a dual-channel supply chain should adopt BCT. Specifically, we consider two scenarios: without BCT adoption (Scenario N) and with BCT adoption (Scenario B). By modeling the two effects, this study investigates the impact of BCT on equilibrium strategies and the boundary conditions under which the brand owner is motivated to implement BCT. Our analysis indicates that the adoption of BCT is always beneficial to the retailer, which creates a “free-rider” problem. However, the brand owner does not always benefit from BCT adoption. The brand owner should adopt BCT when the MSA effect is small and the retailer's market share in Scenario B exceeds a certain threshold, even if there is no TMPI effect. Otherwise, it is wise for the brand owner to adopt BCT only when the TMPI effect is sufficiently large. Interestingly, we also find that the MSA effect plays a role in alleviating channel conflict and partially coordinating the dual-channel supply chain. The results provide managerial insights into whether brand owners should adopt BCT to improve product traceability.

Suggested Citation

  • Zhu, Shichao & Li, Jian & Wang, Shouyang & Xia, Yusen & Wang, Yajing, 2023. "The role of blockchain technology in the dual-channel supply chain dominated by a brand owner," International Journal of Production Economics, Elsevier, vol. 258(C).
    • Handle: RePEc:eee:proeco:v:258:y:2023:i:c:s0925527323000233
    DOI: 10.1016/j.ijpe.2023.108791
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0925527323000233
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.ijpe.2023.108791?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Niu, Baozhuang & Mu, Zihao & Cao, Bin & Gao, Jie, 2021. "Should multinational firms implement blockchain to provide quality verification?," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 145(C).
    2. Ji, Guojun & Zhou, Shu & Lai, Kee-Hung & Tan, Kim Hua & Kumar, Ajay, 2022. "Timing of blockchain adoption in a supply chain with competing manufacturers," International Journal of Production Economics, Elsevier, vol. 247(C).
    3. Yang, Huixiao & Chen, Wenbo, 2020. "Game modes and investment cost locations in radio-frequency identification (RFID) adoption," European Journal of Operational Research, Elsevier, vol. 286(3), pages 883-896.
    4. Albert Ha & Xiaoyang Long & Javad Nasiry, 2016. "Quality in Supply Chain Encroachment," Manufacturing & Service Operations Management, INFORMS, vol. 18(2), pages 280-298, May.
    5. Wang, Junjin & Liu, Jiaguo & Wang, Fan & Yue, Xiaohang, 2021. "Blockchain technology for port logistics capability: Exclusive or sharing," Transportation Research Part B: Methodological, Elsevier, vol. 149(C), pages 347-392.
    6. Guojun Ji & Shu Zhou & Kee-Hung Lai & Kim Hua Tan & Ajay Kumar, 2022. "Timing of blockchain adoption in a supply chain with competing manufacturers," Post-Print hal-03628403, HAL.
    7. Kyle Cattani & Wendell Gilland & Hans Sebastian Heese & Jayashankar Swaminathan, 2006. "Boiling Frogs: Pricing Strategies for a Manufacturer Adding a Direct Channel that Competes with the Traditional Channel," Production and Operations Management, Production and Operations Management Society, vol. 15(1), pages 40-56, March.
    8. Baozhuang Niu & Kanglin Chen & Xin Fang & Xiaohang Yue & Xin Wang, 2019. "Technology Specifications and Production Timing in a Co‐Opetitive Supply Chain," Production and Operations Management, Production and Operations Management Society, vol. 28(8), pages 1990-2007, August.
    9. Timothy W. McGuire & Richard Staelin, 1983. "An Industry Equilibrium Analysis of Downstream Vertical Integration," Marketing Science, INFORMS, vol. 2(2), pages 161-191.
    10. Chen, Jing & Zhang, Hui & Sun, Ying, 2012. "Implementing coordination contracts in a manufacturer Stackelberg dual-channel supply chain," Omega, Elsevier, vol. 40(5), pages 571-583.
    11. Choi, Tsan-Ming & Feng, Lipan & Li, Rong, 2020. "Information disclosure structure in supply chains with rental service platforms in the blockchain technology era," International Journal of Production Economics, Elsevier, vol. 221(C).
    12. Wang, Yingjia & Lin, Jiaxin & Choi, Tsan-Ming, 2020. "Gray market and counterfeiting in supply chains: A review of the operations literature and implications to luxury industries," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 133(C).
    13. Fan, Ti-Jun & Chang, Xiang-Yun & Gu, Chun-Hua & Yi, Jian-Jun & Deng, Sheng, 2014. "Benefits of RFID technology for reducing inventory shrinkage," International Journal of Production Economics, Elsevier, vol. 147(PC), pages 659-665.
    14. Guan, Xu & Huang, Song & Chen, Ying-Ju, 2022. "Acquisition transparency and induced supplier encroachment," Omega, Elsevier, vol. 108(C).
    15. Seungjin Whang, 2010. "Timing of RFID Adoption in a Supply Chain," Management Science, INFORMS, vol. 56(2), pages 343-355, February.
    16. Tsan‐Ming Choi & Subodha Kumar & Xiaohang Yue & Hau‐Ling Chan, 2022. "Disruptive Technologies and Operations Management in the Industry 4.0 Era and Beyond," Production and Operations Management, Production and Operations Management Society, vol. 31(1), pages 9-31, January.
    17. Feng Tao & Tijun Fan & Kin Keung Lai & Lin Li, 2017. "Impact of RFID technology on inventory control policy," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 68(2), pages 207-220, February.
    18. Li, Guo & Xue, Jing & Li, Na & Ivanov, Dmitry, 2022. "Blockchain-supported business model design, supply chain resilience, and firm performance," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 163(C).
    19. Song Huang & Xu Guan & Ying†Ju Chen, 2018. "Retailer Information Sharing with Supplier Encroachment," Production and Operations Management, Production and Operations Management Society, vol. 27(6), pages 1133-1147, June.
    20. Bin Shen & Ciwei Dong & Stefan Minner, 2022. "Combating Copycats in the Supply Chain with Permissioned Blockchain Technology," Production and Operations Management, Production and Operations Management Society, vol. 31(1), pages 138-154, January.
    21. Xu Guan & Baoshan Liu & Ying‐ju Chen & Hongwei Wang, 2020. "Inducing Supply Chain Transparency through Supplier Encroachment," Production and Operations Management, Production and Operations Management Society, vol. 29(3), pages 725-749, March.
    22. Volodymyr Babich & Gilles Hilary, 2020. "OM Forum—Distributed Ledgers and Operations: What Operations Management Researchers Should Know About Blockchain Technology," Manufacturing & Service Operations Management, INFORMS, vol. 22(2), pages 223-245, March.
    23. Li, Yuze & Jiang, Shangrong & Shi, Jianming & Wei, Yunjie, 2021. "Pricing strategies for blockchain payment service under customer heterogeneity," International Journal of Production Economics, Elsevier, vol. 242(C).
    24. Gabriella M. Hastig & ManMohan S. Sodhi, 2020. "Blockchain for Supply Chain Traceability: Business Requirements and Critical Success Factors," Production and Operations Management, Production and Operations Management Society, vol. 29(4), pages 935-954, April.
    25. Cao, Yifan & Shen, Bin, 2022. "Adopting blockchain technology to block less sustainable products’ entry in global trade," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 161(C).
    26. Kay-Yut Chen & Murat Kaya & Özalp Özer, 2008. "Dual Sales Channel Management with Service Competition," Manufacturing & Service Operations Management, INFORMS, vol. 10(4), pages 654-675, June.
    27. Alexandre Dolgui & Dmitry Ivanov, 2022. "5G in digital supply chain and operations management: fostering flexibility, end-to-end connectivity and real-time visibility through internet-of-everything," International Journal of Production Research, Taylor & Francis Journals, vol. 60(2), pages 442-451, January.
    28. Yacine Rekik, 2011. "Inventory inaccuracies in the wholesale supply chain," Post-Print hal-02312498, HAL.
    29. Krittinee Nuttavuthisit & John Thøgersen, 2017. "The Importance of Consumer Trust for the Emergence of a Market for Green Products: The Case of Organic Food," Journal of Business Ethics, Springer, vol. 140(2), pages 323-337, January.
    30. Li, Jian & He, Zhou & Wang, Shouyang, 2022. "A survey of supply chain operation and finance with Fintech: Research framework and managerial insights," International Journal of Production Economics, Elsevier, vol. 247(C).
    31. Fangruo Chen & Awi Federgruen & Yu-Sheng Zheng, 2001. "Coordination Mechanisms for a Distribution System with One Supplier and Multiple Retailers," Management Science, INFORMS, vol. 47(5), pages 693-708, May.
    32. Rekik, Yacine, 2011. "Inventory inaccuracies in the wholesale supply chain," International Journal of Production Economics, Elsevier, vol. 133(1), pages 172-181, September.
    33. Lee, Jongkuk & Palekar, Udatta S. & Qualls, William, 2011. "Supply chain efficiency and security: Coordination for collaborative investment in technology," European Journal of Operational Research, Elsevier, vol. 210(3), pages 568-578, May.
    34. Choi, Tsan-Ming, 2019. "Blockchain-technology-supported platforms for diamond authentication and certification in luxury supply chains," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 128(C), pages 17-29.
    35. Wei-yu Kevin Chiang & Dilip Chhajed & James D. Hess, 2003. "Direct Marketing, Indirect Profits: A Strategic Analysis of Dual-Channel Supply-Chain Design," Management Science, INFORMS, vol. 49(1), pages 1-20, January.
    36. Szmerekovsky, Joseph G. & Zhang, Jiang, 2008. "Coordination and adoption of item-level RFID with vendor managed inventory," International Journal of Production Economics, Elsevier, vol. 114(1), pages 388-398, July.
    37. repec:hal:journl:hal-02312467 is not listed on IDEAS
    38. Jiri Chod & Nikolaos Trichakis & Gerry Tsoukalas & Henry Aspegren & Mark Weber, 2020. "On the Financing Benefits of Supply Chain Transparency and Blockchain Adoption," Management Science, INFORMS, vol. 66(10), pages 4378-4396, October.
    39. Jiang, Rong & Kang, Yuanjie & Liu, Yongsong & Liang, Zhihong & Duan, Yunlong & Sun, Yani & Liu, Jialan, 2022. "A trust transitivity model of small and medium-sized manufacturing enterprises under blockchain-based supply chain finance," International Journal of Production Economics, Elsevier, vol. 247(C).
    40. Huiqi Guan & Haresh Gurnani & Xin Geng & Yadong Luo, 2019. "Strategic Inventory and Supplier Encroachment," Manufacturing & Service Operations Management, INFORMS, vol. 21(3), pages 536-555, July.
    41. Samayita Guha & Subodha Kumar, 2018. "Emergence of Big Data Research in Operations Management, Information Systems, and Healthcare: Past Contributions and Future Roadmap," Production and Operations Management, Production and Operations Management Society, vol. 27(9), pages 1724-1735, September.
    42. Zhuoxin Li & Stephen M. Gilbert & Guoming Lai, 2014. "Supplier Encroachment Under Asymmetric Information," Management Science, INFORMS, vol. 60(2), pages 449-462, February.
    43. Ivanov, Dmitry & Dolgui, Alexandre & Sokolov, Boris, 2022. "Cloud supply chain: Integrating Industry 4.0 and digital platforms in the “Supply Chain-as-a-Service”," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 160(C).
    44. De Giovanni, Pietro, 2020. "Blockchain and smart contracts in supply chain management: A game theoretic model," International Journal of Production Economics, Elsevier, vol. 228(C).
    45. Yunchuan Liu & Z. John Zhang, 2006. "Research Note—The Benefits of Personalized Pricing in a Channel," Marketing Science, INFORMS, vol. 25(1), pages 97-105, 01-02.
    46. Hao Wu & Gangshu (George) Cai & Jian Chen & Chwen Sheu, 2015. "Online Manufacturer Referral to Heterogeneous Retailers," Production and Operations Management, Production and Operations Management Society, vol. 24(11), pages 1768-1782, November.
    47. Choi, Tsan-Ming & Siqin, Tana, 2022. "Blockchain in logistics and production from Blockchain 1.0 to Blockchain 5.0: An intra-inter-organizational framework," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 160(C).
    48. Maher Agi & Ashish Kumar Jha, 2022. "Blockchain technology in the supply chain: An integrated theoretical perspective of organizational adoption," Post-Print hal-03602937, HAL.
    49. Agi, Maher A.N. & Jha, Ashish Kumar, 2022. "Blockchain technology in the supply chain: An integrated theoretical perspective of organizational adoption," International Journal of Production Economics, Elsevier, vol. 247(C).
    50. Long Gao & Liang Guo & Adem Orsdemir, 2021. "Dual‐Channel Distribution: The Case for Cost Information Asymmetry," Production and Operations Management, Production and Operations Management Society, vol. 30(2), pages 494-521, February.
    51. Li, Jin & Yi, Liao & Shi, Victor & Chen, Xiding, 2021. "Supplier encroachment strategy in the presence of retail strategic inventory: Centralization or decentralization?," Omega, Elsevier, vol. 98(C).
    52. Hubert Pun & Jayashankar M. Swaminathan & Pengwen Hou, 2021. "Blockchain Adoption for Combating Deceptive Counterfeits," Production and Operations Management, Production and Operations Management Society, vol. 30(4), pages 864-882, April.
    53. Li, Qiu-xiang & Ji, Hui-min & Huang, Yi-min, 2022. "The information leakage strategies of the supply chain under the block chain technology introduction," Omega, Elsevier, vol. 110(C).
    54. Behnke, Kay & Janssen, M.F.W.H.A., 2020. "Boundary conditions for traceability in food supply chains using blockchain technology," International Journal of Information Management, Elsevier, vol. 52(C).
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Klöckner, Maximilian & Schmidt, Christoph G. & Fink, Alexander & Flückiger, Leonie & Wagner, Stephan M., 2023. "Exploring the physical–digital interface in blockchain applications: Insights from the luxury watch industry," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 179(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Zhang, Tianyu & Dong, Peiwu & Chen, Xiangfeng & Gong, Yu, 2023. "The impacts of blockchain adoption on a dual-channel supply chain with risk-averse members," Omega, Elsevier, vol. 114(C).
    2. Zhang, Xuefeng & Li, Guo & Liu, Mengqi & Sethi, Suresh P., 2021. "Online platform service investment: A bane or a boon for supplier encroachment," International Journal of Production Economics, Elsevier, vol. 235(C).
    3. Klöckner, Maximilian & Schmidt, Christoph G. & Fink, Alexander & Flückiger, Leonie & Wagner, Stephan M., 2023. "Exploring the physical–digital interface in blockchain applications: Insights from the luxury watch industry," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 179(C).
    4. Chen, Jing & Pun, Hubert & Zhang, Qiao, 2023. "Eliminate demand information disadvantage in a supplier encroachment supply chain with information acquisition," European Journal of Operational Research, Elsevier, vol. 305(2), pages 659-673.
    5. Baoshan Liu & Xu Guan & Yulan Wang, 2021. "Supplier Encroachment with Multiple Retailers," Production and Operations Management, Production and Operations Management Society, vol. 30(10), pages 3523-3539, October.
    6. Liu, Shuai & Hua, Guowei & Kang, Yuxuan & Edwin Cheng, T.C. & Xu, Yadong, 2022. "What value does blockchain bring to the imported fresh food supply chain?," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 165(C).
    7. Xue, Musen & Zhang, Jianxiong & Zhu, Guowei, 2020. "Quantity decision timing with spillover effect and asymmetric demand information," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 142(C).
    8. Cao, Yu & Yi, Chaoqun & Wan, Guangyu & Hu, Hanli & Li, Qingsong & Wang, Shouyang, 2022. "An analysis on the role of blockchain-based platforms in agricultural supply chains," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 163(C).
    9. Tiwari, Sunil & Sharma, Pankaj & Choi, Tsan-Ming & Lim, Andrew, 2023. "Blockchain and third-party logistics for global supply chain operations: Stakeholders’ perspectives and decision roadmap," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 170(C).
    10. Li, Qingying & Ma, Manqiong & Shi, Tianqin & Zhu, Chen, 2022. "Green investment in a sustainable supply chain: The role of blockchain and fairness," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 167(C).
    11. Siyu Shi & Chenyu Wang & T. C. Edwin Cheng & Shuai Liu, 2023. "Manufacturer encroachment with an e‐commerce division," Production and Operations Management, Production and Operations Management Society, vol. 32(6), pages 2002-2019, June.
    12. Zhou, Yu & Gao, Xiang & Luo, Suyuan & Xiong, Yu & Ye, Niangyue, 2022. "Anti-Counterfeiting in a retail Platform: A Game-Theoretic approach," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 165(C).
    13. Xu, Xiaoping & He, Ping & Zhou, Li & Cheng, T.C.E., 2023. "Coordination of a platform-based supply chain in the marketplace or reselling mode considering cross-channel effect and blockchain technology," European Journal of Operational Research, Elsevier, vol. 309(1), pages 170-187.
    14. Matsui, Kenji, 2024. "Should competing suppliers with dual-channel supply chains adopt agency selling in an e-commerce platform?," European Journal of Operational Research, Elsevier, vol. 312(2), pages 587-604.
    15. Ningning Wang & Zhuoxin Li, 2021. "Supplier Encroachment with a Dual‐Purpose Retailer," Production and Operations Management, Production and Operations Management Society, vol. 30(8), pages 2672-2688, August.
    16. Kumar, Sourabh & Barua, Mukesh Kumar, 2023. "Exploring the hyperledger blockchain technology disruption and barriers of blockchain adoption in petroleum supply chain," Resources Policy, Elsevier, vol. 81(C).
    17. Matsui, Kenji, 2020. "Optimal bargaining timing of a wholesale price for a manufacturer with a retailer in a dual-channel supply chain," European Journal of Operational Research, Elsevier, vol. 287(1), pages 225-236.
    18. Luo, Huajiang & Niu, Baozhuang, 2022. "Impact of competition type on a competitive manufacturer's preference of decision timing," International Journal of Production Economics, Elsevier, vol. 251(C).
    19. Bin Shen & Ciwei Dong & Stefan Minner, 2022. "Combating Copycats in the Supply Chain with Permissioned Blockchain Technology," Production and Operations Management, Production and Operations Management Society, vol. 31(1), pages 138-154, January.
    20. Wan, Xing & Chen, Jing & Li, Wei, 2023. "The impact of retail pricing leadership under manufacturer encroachment," European Journal of Operational Research, Elsevier, vol. 310(1), pages 217-237.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:proeco:v:258:y:2023:i:c:s0925527323000233. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/ijpe .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.