Price optimization for manufacturers in a competitive retail market: imported products and online crowdfunding option

Abstract

This study explores how manufacturers in the competitive supply chain can set prices and secure funding effectively. We use game theory to look at how competition between domestic and foreign manufacturers affects pricing decisions. Our research investigates how a domestic manufacturer can improve its market share by addressing financial challenges through modern financing methods. In this scenario, a domestic manufacturer competes with a foreign one to attract a retailer’s market share and profits. The retailer decides what products to buy and how to price them based on bid prices and demand. We also consider that the domestic manufacturer will use online crowdfunding platforms to tackle its financial problem. Hence, our study sets up a supply chain where competition revolves around both operational and financial decisions. Mathematical models are developed to analyze how costs, finances, market potential, and price sensitivity impact various parts of the supply chain. The results reveal that decisions made on the crowdfunding platform significantly influence other supply chain decisions. Manufacturers and retailers need to pay attention to the financial decisions made on this platform to maximize profits. Also, domestic and foreign manufacturers should consider customer preferences for their products when setting prices. Finally, the results demonstrate that a domestic manufacturer can gain a competitive edge in the retail market by carefully considering both product pricing and financial decisions, including those made on the lending platform.