Low-carbon strategies in the alliance between manufacturer and weak customer considering different contracts.

With the rise of influential customers and environmental issues, this paper studies the alliance effect of the manufacturer and its weak customers by differential Stackelberg game. Low-carbon production and dynamic pricing strategies are analyzed in alliance and no-alliance situations. The results find that forming an alliance between the manufacturer and its weaker customer helps them resist the advantages of a stronger retailer. Compared to the no-alliance strategy, the alliance strategy will decrease their profits. The stronger customer needs to set a lower retail price toward the alliance between the manufacturer and the weak customer. And it can narrow the price gap in two situations by increasing its proportion of sales revenue. Moreover, when consumers care less about the product's environmental problems, all the partner firms in the supply chain will price lower and make fewer efforts on low-carbon production. [ABSTRACT FROM AUTHOR]