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Article Dans Une Revue Journal of Economics and Management Strategy Année : 2015

Optimal Production Channel for Private Labels: Too Much or Too Little Innovation?

Résumé

We analyze the impact of the private label production channel on innovation. A retailer may either choose to integrate backward with a small firm (insourcing) or rely on a national brand manufacturer (outsourcing) to produce its private label. The trade-off between insourcing and outsourcing strategies is a choice between too much or too little innovation (i.e., quality investment) on the private label. When insourcing, an outside-option effect leads the retailer to overinvest to increase its buyer power. When outsourcing, a hold-up effect leads to underinvestment. In addition, selecting the national brand manufacturer may create economies of scale that spur innovation.

Dates et versions

halshs-01242601 , version 1 (13-12-2015)

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Claire Chambolle, Clémence Christin, Guy Meunier. Optimal Production Channel for Private Labels: Too Much or Too Little Innovation?. Journal of Economics and Management Strategy, 2015, 24 (2), pp.348-368. ⟨10.1111/jems.12098⟩. ⟨halshs-01242601⟩
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