Abstract: This paper considers a dual-channel supply chain where a manufacturer opens the online channel, and investigates quality disclosure strategies with a potential market entry. Based on game theory, three decision models of non-competition, online channel selection and retail channel selection are established, and the optimal solutions are obtained. This paper considers interaction of information disclosure and channel selection strategies, and analyzes the impacts of quality differentiation on the manufacturer’s disclosure strategy and optimal profits. The results show that disclosure strategies of the incumbent manufacturer depend on product similarity and disclosure costs. When there is competition in the online (retail) channel, the manufacturers will be less willing to to disclose quality information. Finally, the influence of product similarity on the optimal entry mode of intruder manufacturers is analyzed, and corresponding management opinions are put forward.

Key words: quality disclosure, dual-channel, quality differentiation, channel selection