Analysis on electronic market competition and capacity optimization based on a weakest traditional retailer: From a channel sale effort effect perspective

Sale effort competition and capacity optimization in electronic markets happens familiarly in two manufacturers. Being a channel leader the first manufacturer's role becomes complicated which still owns a weakest traditional retailer at the same time. Focusing on channel sales effort effect, the paper finds out their optimal decisions, and conditions in which supply chain coordinates. The key study by numerical analysis is that how two manufacturers' channel sales effort effect affects three enterprises' optimal revenues, optimal prices, especially two the first manufacturer's capacity decisions. Besides, some managerial inspiration could be given out.