Sustainable Operation Structures in the Cross-Border Enterprise Ecosystem under Tariff Fluctuations: A Systematic Evaluation

Abstract

In a business ecosystem, cross-border enterprises are vulnerable to disruptions such as tariff fluctuations. By modeling distribution structures, this paper explores how cross-border enterprises develop ecological advantages and improve their resilience. With system dynamics methodology, a cross-border enterprise ecosystem is modeled in the context of employing a distributor in a foreign jurisdiction overseeing product distribution (as a commissionaire or a fully fledged distributor). This study compares the dynamic performance of different distribution structures in response to tariff changes. The comparative results reveal that enterprises with distributors are more resilient to tariff fluctuations than those without distributors. This study proposes an effective measure to mitigate the disruptions caused by a tariff change; reducing transfer prices within a range can help to recover some of the lost profits and sales caused by a tariff increase. Moreover, this research provides practical implications on ideal operating structures for various purposes under tariff changes; implementing a commissionaire model leads to the highest profit, while implementing a fully fledged distributor model provides a more friendly market environment to customers. The provided insights have theoretical and practical value for policy makers, managers and investors to deal with a wide spectrum of strategic business ecosystem challenges.

Keywords

• business ecosystem
• tariff fluctuation
• distribution structure
• system dynamics