Is Revenue Sharing Right for Your Supply Chain?
CALIFORNIA MANAGEMENT REVIEW VOL. 56, NO. 4 SUMMER 2014
34 Pages Posted: 26 Aug 2016
Date Written: May 5, 2014
Many firms have enjoyed remarkable success using revenue-sharing contracts to improve supply chain performance. The video rental industry and its pioneering deal with movie studios is one such example. At the same time, other firms have struggled to make it work. What accounts for this difference? When can revenue sharing create significant value and what are the implementation costs? By comparing and contrasting several case examples, this article develops a general framework that helps answer these questions, which is based on the fundamental sources of added value and added cost.
Keywords: Contracts, Operations Management, Supply Chain
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