Study of Retailer Private Brand Invasion Strategy under Different Manufacturers’ Operational Objectives

This thesis explores a two-tier supply chain with a manufacturer and a retailer, focusing on whether the manufacturer’s goals include consumer surplus. It examines how the manufacturer’s consideration of consumer surplus affects the retailer’s strategy for introducing private brands and compares outcomes under scenarios where the manufacturer pursues either pure profit or a balance of profit and consumer surplus. The findings reveal that the retailer’s strategies can be classified into non-effective, threatening, and mixed, depending on the competitive strength of the private brand. A manufacturer prioritizing both profit and consumer surplus tends to limit effective retailer invasions, reduce potential profit losses from successful invasions, diminish the double marginalization effect, decrease its own profits, but increase those of the retailer, enhance overall supply chain performance, and boost total consumer surplus.