Sourcing from national brand manufacturer or third-party manufacturer: Operational impact of information sharing on a platform-based supply chain

In the modern platform-driven distribution and transportation service systems, dominant platforms typically face the option of sourcing store brands (SBs) from either national brand (NB) manufacturers or third-party (TP) manufacturers to compete with NBs in the consumer market. Within these complex logistics networks, a critical supply chain management challenge is whether platforms should share private demand information with SB suppliers and how such information sharing influences SB sourcing and operational decisions. To address this concern, we investigate the strategic interactions between the platform’s information sharing strategies and SB sourcing decisions. Our findings show that equilibrium strategies are affected by commission rate and consumers’ perceived quality of SB relative to NB. Specifically, the platform has no incentive to share information when commission rate is low. When commission rate is high and consumers’ relative perceived quality of SB is low, platform shares information with NB manufacturer who supplies both SB and NB. Interestingly, the platform can take the strategic advantage of information sharing to establish a mutually beneficial partnership with NB manufacturer. However, when consumers’ relative perceived quality of SB becomes sufficiently high, the platform sources SB from TP manufacturer without sharing information. More importantly, we demonstrate the operational value of information sharing that makes the platform more inclined to source SB from NB manufacturer. Additionally, sourcing from TP manufacturer becomes more attractive when the platform adopts full information sharing strategy. Furthermore, we illustrate the non-monotonic effects of information accuracy on the platform’s equilibrium profit. Higher accuracy benefits the platform when sourcing from NB manufacturer but reduces its profit advantage when sourcing from TP manufacturer.