The Competitive Strategies of Direct Selling Business in China
Date Issued
2006
Date
2006
Author(s)
Wang, Tze-Yun
DOI
zh-TW
Abstract
After the reformed and open policy, China is devoted to economic development and is placing a strong emphasis on attracting foreign capital. However, resulting from the entry of direct selling into China, the tripartite relationship between the government, the direct selling enterprise and the populace is experiencing a severe chain-reaction. After reviewing the worldwide development experience of direct selling industry, this research took 1998 (the year of ban against direct selling in China) as a pivotal year to study the market condition before the government’s ban, and the transition strategies adapted by the major direct selling enterprises after that year.
In September 2005, China fulfilled the commitment to the WTO by legislation on opening direct selling once again. Since then, the direct selling industry has been entered into a renewed competitive stage in China’s market. Under the strict legislative attitude by the government, this research simulates the provincial enforcement of the law either strictly or loosely. A simulation sought to show the racing between Avon and Amway-leaders in single level and multi-level industries respectively- in the areas of licensing, service network, commission structure, product strategy and sales representatives. Furthermore, based on the suppositions gained from dynamic games of incomplete information, Avon would possess absolute competitive superiority if the government enforces the law strictly. However, if the government enforces the law loosely, the best strategy for Avon should depend on the probability of Amway’s transition to pure single-level model.
Subjects
直銷業
單層次
多層次
不完全訊息之動態賽局
Direct Selling Industry
Single-Level
Multi-Level
Dynamic Games of Incomplete Information
SDGs
Type
other
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