STRATEGY OF E-COMMERCE MARKET ENTRY BASED ON VERTICAL COMPLEMENTARITY OF SERVICE SUPPLY CHAIN

Aiming at the vertical complementary service supply chain composed of duopoly traditional enterprises and monopoly platform enterprises, this paper adopts the platform experience level and the complementary levels of compatible parties as decision variables and Cournot game and Stackelberg game as modeling methods to study the problem for two parties to make the optimal decision, in case that upstream and downstream markets are compatible with each other in order to improve competitiveness, while upstream markets may enter downstream markets through compatibility. This paper shows that the complementary compatibility between upstream and downstream supply chains is an effective strategy to improve competitiveness, achieve market share and profit growth. The higher the experience level of the incumbent platform is, the greater the complementarity between upstream and downstream will be, and the greater the profit improvement that compatible parties may obtain. For the entry threat of upstream compatible enterprises, the incumbent platform can choose three strategies: blocking compatibility, entering compatibility and rejecting compatibility. Blocking compatibility requires a high level of experience and a small complementarity. Entering compatibility requires higher experience level and smaller complementarity. When the level of experience is low or complementarity is large, the platform will choose to the rejecting compatibility strategy.