<p>This paper formulates an inventory model to examine how new entrants can penetrate markets dominated by established retailers. Focusing on the innovative limited-time delivery guarantee and rebate strategy, the model illustrates how these factors impact long-run profitability and competitive positioning. The analysis reveals the interplay between set-up costs, holding costs, and demand variability in shaping pricing strategies. Key findings provide managerial insights for businesses aiming to adopt similar delivery innovations, highlighting that strategic adjustments in delivery guarantees and rebates can enhance profitability and customer satisfaction. Furthermore, we propose pricing strategies that enable new retailers to leverage existing market prices effectively, offering a competitive edge. This theoretical framework contributes to both business management practices and academic discourse, equipping new market entrants with strategies for success in competitive environments.</p>

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Optimal pricing and inventory strategies with delivery delay compensation in dominated markets

  • Wen Chen

摘要

This paper formulates an inventory model to examine how new entrants can penetrate markets dominated by established retailers. Focusing on the innovative limited-time delivery guarantee and rebate strategy, the model illustrates how these factors impact long-run profitability and competitive positioning. The analysis reveals the interplay between set-up costs, holding costs, and demand variability in shaping pricing strategies. Key findings provide managerial insights for businesses aiming to adopt similar delivery innovations, highlighting that strategic adjustments in delivery guarantees and rebates can enhance profitability and customer satisfaction. Furthermore, we propose pricing strategies that enable new retailers to leverage existing market prices effectively, offering a competitive edge. This theoretical framework contributes to both business management practices and academic discourse, equipping new market entrants with strategies for success in competitive environments.