Abstract
This paper evaluates efficacy of supplier and manufacturer innovation under an asymmetric competing supply chain consisting of one supplier and two manufacturers. We depict pricing decisions and innovation strategies under three models, namely, benchmark model, supplier-led, and manufacturer-led innovation models. It is shown that although the supplier is motivated to innovate, all innovation strategies have more profits than single innovation strategies. In addition, when no manufacturer creates the product, one manufacturer will obtain a good profit from the innovation, while facing the competitor, the other manufacturer will have incentive to innovate. Moreover, we also evaluate implications of innovation strategy for consumer welfare and overall supply chain efficiency.
Highlights
As automobiles are a convenient means of transportation, the automobile industry is closely related to human life
The practical significance is that for the supply chain, to obtain the most profit, it is not necessary to create the products of all channels
This paper investigates the efficacy of supplier innovation and manufacturer innovations in a dual channel model with competing supply chains
Summary
As automobiles are a convenient means of transportation, the automobile industry is closely related to human life. Technological innovation has been the focus of battery manufacturers and automotive OEMs, who seem to be taking a more active approach to solid-state battery development. The paper [1] argued that supply chain innovation usually occurs at the supplier, manufacturer, and “supplier plus manufacturer” stages They proposed that from the perspective of organizational action, innovation can be divided into three categories, marketing-oriented, logistics-oriented, and technology-oriented innovation activities. In a patent analysis of the automobile industry, they showed that different supply chain members dominate innovation in different product categories [13] They showed that the collaboration between an automaker and a supplier to develop eco-innovations has a positive impact on the supplier’s electrical and hybrid capabilities [14].
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