A Decision Model for E-commerce-enabled Partial Market Exit

Authors

Siddhartha Syam, Marquette UniversityFollow
Amit Bhatnagar, University of Wisconsin - Milwaukee

Document Type

Article

Language

eng

Format of Original

13 p.

Publication Date

12-2010

Publisher

Elsevier

Source Publication

Journal of Retailing

Source ISSN

0022-4359

Abstract

Struggling retail chains often try to recover profitability by closing some of their stores. The challenge in this strategy lies in determining how many stores to close, as store exit has implications for both the customers and the supply chain. After a store closes, its customers are lost forever to the competition, unless there is a surviving open store nearby or an electronic alternative such as an e-store. From the supply chain perspective, after a store closes, its supporting regional distribution center is left with less business, and thus reduced viability. This paper develops a decision support model to study the profitability of alternative retail network structures by varying the proportion of stores that are closed, the average price sensitivity of demand, the price difference between the online store and the traditional retailers, and customer retention rates.

Comments

Post-print. Journal of Retailing, Volume 86, No. 4 (December 2010), DOI. © Elsevier 2010. Used with permission.

Recommended Citation

Syam, Siddhartha and Bhatnagar, Amit, "A Decision Model for E-commerce-enabled Partial Market Exit" (2010). Management Faculty Research and Publications. 44.
https://epublications.marquette.edu/mgmt_fac/44