Securing the network in e-retailing and manufacturing: a balanced decision analysis under competition and cooperation modes

Abstract

With the continuous emergence of network problems, the e-commerce supply chain faces the risk of network attacks. This paper studies a dual-channel supply chain, where manufacturers can earn revenue through online channels (i.e. manufacturers sell products through e-retailers) and offline channels (i.e. manufacturers sell products directly to consumers). In the online channel, we analysed two modes. The first is the competitive model, where e-tailers buy products from manufacturers and resell them to consumers. The second is a cooperative model, in which manufacturers pay a commission to sell products to consumers on e-retailer platforms. We divide the network risk prevention methods into three models: the M model (wherein the manufacturer conducts risk defense blocking), the E model (wherein e-retailers conduct risk defense blocking), and the ME model (wherein e-retailers and manufacturers conduct risk defense blocking simultaneously). These cases are discussed in this paper. The results show that manufacturers and e-retailers will gain the highest profit in the ME model, regardless of competition mode or cooperation mode. As a result, manufacturers and retailers can simultaneously mount cyber defenses seeking to maximize profits. In addition, government subsidies have a positive effect on encouraging supply chain members to take defensive measures.