Author: Siqin, Tana
Title: Multi-channel management and platform operations in the digital era
Advisors: Chung, Sai-ho Nick (ISE)
Choi, Tsan-ming Jason (ISE)
Xin, Windy (ISE)
Degree: Ph.D.
Year: 2022
Subject: Electronic commerce -- Simulation methods
Mobile commerce
Hong Kong Polytechnic University -- Dissertations
Department: Department of Industrial and Systems Engineering
Pages: vii, 144 pages : color illustrations
Language: English
Abstract: Nowadays, e-commerce becomes more and more important for multi-channel operations with the rapid development of sophisticated information technologies. As a result, multi-channel operations have expanded to cover various types of online channels, such as the firms' official websites, mobile apps, and third-party platforms. When the multi-channel operations strategy is adopted, channels interact with each other. Considering the impacts of cross-channel influences, channel selection and coordination are complicated but crucial for multi-channel operations. On the other hand, towards facilitating connection and collaboration among parties, platforms of all kinds are very popular. From the perspective of platform functions, they can be classified into product selling platforms (e.g., e-commerce platforms) and service platforms (e.g., social media platforms). In this situation, in the e-commerce era, it is important for firms to strategically implement platforms to improve operations (e.g., generating higher profit or social welfare). Motivated by the importance of multi-channel operations and platform management, this thesis aims to: (i) Investigate the impacts of cross-channel influences on the mobile-app-website and e-platform-website multi-channel operations; (ii) explore the optimal channel structure and coordination contract for multi-channel operations; (iii) examine the optimal implementation of social media platform to launch advertisement (including the probable case of negative publicity). In this thesis, a chapter is devoted to each of the above major topics under exploration. Moreover, to analyze the proposed issues, the analytical modeling approach is adopted to characterize different research problems and derive theoretically solid findings.
Regarding aim (i), we first consider the case where an e-tailer sells products in a mobile-app (MA)-website (WS) dual channel newsvendor supply chain. In this dual channel supply chain, the e-tailer can adopt risk pooling (by aggregating the demands from MA and WS channels together) and invest in forecast-enhancement technology (FET) to improve inventory management. Considering the impacts of cross-channel influences, demand from one online channel may increase (called channel reinforcement effect) or decrease the demand from the other online channel (called the channel cannibalization effect). The influences are not necessarily symmetric. First, by building the analytical models and solving the respective optimization problems, we derive the optimal inventory decision and investment level for FET. We uncover that when the magnitude of cross-channel influence increases, the impacts on the optimal inventory decision, as well as performances of the e-commerce supply chain and its agents, vary greatly (depending on four different "model cases"); interestingly, it has no impact on the optimal FET decision. In addition, we examine the supply chain coordination challenge in this MA-WS dual channel and explore the impacts of cross-channel influences under different contracts.
Second, in order to explore the impacts brought by cross-channel influences in dual channel and the optimal channel selection and coordination problem (i.e., aim (ii)), we consider the case where an e-tailer can sell products through the e-platform and/or direct selling channel. We build analytical models to explore "when" an e-tailer should choose "which" channel structure and how to coordinate these dual channels with the consideration of cross-channel influences. Based on the commonly-observed industrial practices, we derive the optimal e-platform service contract which is a revenue-sharing plus fixed fee (RSF) service contract. Then, we establish the conditions under which the e-tailer's optimal channel selection choice will also be optimal for the e-platform systems.
Third, platforms can be adopted to improve e-commerce operations by providing services, in addition to playing as a sales channel. Therefore, we pay attention to the advertising service that social media platforms (SMPs) provide for luxury fashion brands (LFBs) to explore the optimal implementation of service platforms (i.e., aim (iii)). Today, social media platform (SMP) advertising is common for luxury fashion brands (LFBs). Regarding the implementation of SMPs, we consider the scenario in which luxury fashion firms can better identify different groups of consumers and may advertise to them with tailored content (i.e., adopting the customized advertising strategy) at a cost. In this part of the thesis, we explore the optimal SMP-based advertising strategies for a profit-maximizing LFB. We find that whether or not the SMP-based customized advertising strategy outperforms the non-customized strategy depends on the snobbishness level as well as the associated fixed costs. In addition, we analytically uncover that if the snobbishness level is relatively high, implementing controversial advertisements which create negative publicity will be optimal.
To conclude, realizing the significance of multi-channel operations and platform management in the e-commerce age, this thesis conducts three analytical studies to uncover different facets of the associated challenges. The analytical findings and managerial insights generated from this thesis not only contribute to the literature, but also provide valuable guidance for industrial managers who are engaged in platform operations. Last but not least, future research is discussed and hence this thesis also inspires further studies in related directions.
Rights: All rights reserved
Access: open access

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