Competing Supply Chains Research Articles

Investment and Financing Decisions for Fuel Consumption Reduction in a Vehicle Supply Chain

This paper models the financing and fuel reduction investment decisions of a supply chain under chain and chain competition to analyze firms’ pricing, product, and investment and financing strategies. In two competing supply chains, one of them is willing to invest in fuel consumption reduction to meet its carbon social responsibility and pursue a competitive. It can choose between two financing models, manufacturer financing and retailer financing, to address the lack of investment capital. Consumers are inclined to purchase low-fuel consumption vehicles due to the cost of use and carbon concerns. Results show that under the model of manufacturer financing, the utility of both the manufacturer and the retailer improves. However, in this model, the fuel consumption reduction is lower than that under the model of retailer financing. If it takes the model of retailer financing, the manufacturer can achieve higher utility than under the model of manufacturer financing, but the retailer’s profits fall rather than increase. So the retailer would not take it unless the manufacturer and government compensate it.

Behavior-based pricing and wholesale contracting in competing supply chains with informative advertising

The development of e-commerce has enhanced the ability of firms to identify existing and potential customers and set targeted prices accordingly, which is known as behavior-based pricing (BBP). This study investigates the effect of manufacturers’ informative advertising on the strategic interaction between wholesale price contracts (long-term or short-term) and downstream pricing mechanisms (BBP or not). We consider two horizontal differentiated supply chains in which firms not only compete in prices but also in informative advertising which is used to generate awareness of products. We find that the impact of BBP on channel members’ advertising, pricing and profits is the tradeoff of multiple effects. With BBP, manufacturers will advertise less and both retailers and manufacturers prefer short-term wholesale contracts. Moreover, BBP eases the price competition in the first period but intensifies it in the second period, especially for short-term wholesale contracts. In equilibrium, BBP is adopted by retailers only when the advertising cost is low, and manufacturers choose short-term wholesale contracts. Furthermore, BBP always hurts the consumer surplus and social welfare which means that targeted measures are needed to regulate firms’ price discrimination.

Impact of Quality Investment and Vertical Shareholding in Hybrid Competing Supply Chains

Product quality is a key factor affecting consumers’ willingness to buy, providing greater advantages to an enterprise than product price. This paper investigates the impact of two factors, price and quality, on the operational decisions of hybrid competing supply chains. Supply chain I, which consists of a manufacturer and a retailer, is a decentralized structure. Supply chain II, where the manufacturer and retailer are integrated, is a centralized structure. Quality investment and vertical shareholding are introduced into the decentralized supply chain. Models are constructed for three different scenarios, examining whether the manufacturer makes a quality investment and whether the retailer holds shares in the quality investment. By comparing the equilibrium results, solved by the Stackelberg game method, the following conclusions are drawn: (1) Quality investment and shareholding can enhance product quality and price. (2) The retail price in a centralized supply chain is consistently lower than that in a decentralized one, leading to generally higher total profits for centralized supply chain. (3) The total profit of the decentralized supply chain only exceeds that of the centralized ones when the degree of substitution between products is lower than 0.6285 and the quality effort cost factor is within a specific range. While centralized supply chain is generally more advantageous, decentralized supply chain can outperform him under specific conditions.

Mixed competition and horizontal shareholding in competing supply chains

We consider two‐tier competing supply chains wherein downstream firms are engaged in mixed (Cournot–Bertrand or Bertrand–Cournot) competition and one downstream firm horizontally holds the rival firm's profit. Our results show that the type of mixed competition plays a crucial role in determining pricing and quantity decisions. The acquiring supply chain member's profit may be lower than the rival chain in Cournot–Bertrand retail competition. However, in Bertrand–Cournot retail competition, the upstream firm's profit of acquired supply chain is always higher, but the downstream firm's profit may be lower than the acquiring supply chain.

The effects of common ownership on price and quality decisions in competing supply chains

AbstractThis paper examines the implications of common ownership on pricing and quality decisions in supply chains. Our results indicate that the presence of common ownership enhances the quality investment but increases the wholesale price. However, the presence of common ownership induces the retailers to charge lower sales price. Because of higher wholesale price and lower sales price, the manufacturer always benefits from the common ownership but the common ownership always hurts the retailers. The presence of common ownership always benefits consumer surplus and social welfare. The benefits of common ownership are more significant as the common ownership level becomes strong.

To commit or not? The impact of online reviews on retailers' price commitment strategy in competing supply chains

AbstractOnline reviews can effectively mitigate consumers' uncertainty about product valuations, thus affecting firms' pricing decisions. This paper develops a two‐period game model to investigate the impacts of online reviews on the retailer's price commitment strategies in two competing supply chains, each consisting of one manufacturer and one retailer. In the first period, the retailers strategically set prices and decide whether to commit to prices for their products. In the second period, the retailers adjust product prices in response to online reviews, if they choose not to commit to a price. We show that the retailers' price commitment strategies depend on consumers' perceived uncertainty about product valuations, the information value of online reviews and the unit misfit cost. Interestingly, the retailers can benefit from the information value of online reviews by implementing flexible pricing strategies. Furthermore, if the information value of online reviews is sufficiently high, both retailers will choose not to commit to a price in equilibrium. However, if the information value of online reviews is relatively low, the equilibrium in price commitment is asymmetric, that is, the retailer A commits to a price and its competitor chooses not to commit.

Comparison of competing supply chains with different structures under cap-and-trade regulation

To reduce carbon emissions, many countries and regions have implemented carbon cap-and-trade regulation. The main objective of this paper is to explore the economic and environmental impacts of carbon cap-and-trade regulation on two competing supply chains. This paper considers two cases: (i) in the absence of cap-and-trade regulation and (ii) with carbon cap-and-trade regulation. For each case, there are three structures: centralized-centralized (C-C) structure, decentralized-decentralized (D-D) structure, and hybrid centralized-decentralized (C-D) structure. First, this paper analyzes the optimal pricing decisions of two competing supply chains for the two cases, and then explores the impacts of cap-and-trade regulation on the sale price, market demand, economy (include enterprise profits and consumer surplus), environment (i.e., carbon emission) and total social welfare. Finally, numerical examples are provided to illustrate the theoretical results. By comparing the two cases, the main conclusions are as follows: (i) cap-and-trade regulation leads to the increase of unit price and the decrease of the market demand, (ii) cap-and-trade regulation leads to the reduction of both carbon emission and the consumer surplus, (iii) the impacts of cap-and-trade regulation on the profit and social welfare depend on the carbon cap.

Çok Seviyeli Rekabetçi Kapalı Döngü Tedarik Zinciri Ağ Tasarımı: Karşılaştırmalı Bir Analiz

Kısıtlı doğal kaynaklar ve bunların bilinçsizce tüketilmesi, son yıllarda hammadde yerine atık malzemenin işlenme oranının artmasına yol açmış ve endüstriyel ortamı daha rekabetçi hale getirerek, Tedarik Zinciri Yönetiminin (TZY) dinamiklerini değiştirmiştir. Kullanım ömrü sonu ürün sayısının artması ve bunlarla ilgili çevresel kaygılar, aynı zamanda müşteri baskılarına cevap verebilmek adına lojistiğin tersine çevrilmesine büyük özen gösterilerek Kapalı Döngü Tedarik Zinciri (KDTZ) tasarımı ve optimizasyonu üzerine ilgi artmıştır. KDTZ, geniş bir literatüre sahiptir ve bu çerçevede tedarik zinciri maliyetlerini optimize etmek için pek çok model geliştirilmiştir. Literatürün çoğu tekil tedarik zinciri ile ilgilidir ve mevcut rakip tedarik zincirlerini görmezden gelir. Ancak, günümüzün rekabetçi pazarlarında, tedarik zincirleri birkaç rekabetçi şirket tarafından birbirine entegre şeklinde oluşturulmakta ve daha fazla pazar payı elde etmek için birlikte rekabet ederek çalışmaktadır. Böyle bir ortamda, tedarik zincirleri içinde ve arasında farklı rekabet biçimleri vardır. Bu bağlamda, makale ürün geri kazanımı için bir takım teşviklerle kullanılmış ürünleri iade etme isteğini artırarak sürdürülebilir tüketimi iyileştirmeye çalışan iki üretici, bir toplama&geri dönüşüm merkezi ve müşterilerden oluşan çok seviyeli rekabetçi KDTZ yönetiminde dağıtım ağlarının tasarımı ve optimizasyonu problemini ele almaktadır. KDTZ yönetiminde farklı amaçlara sahip karar vericiler için uzlaşık çözüme ulaşmak için dört farklı Etkileşimli Bulanık Programlama (EBP) yaklaşımı kullanılmış ve sonuçlar analiz edilmiştir.

Paying Living Wages in Supply Chains: The Effects of Uncertainties, Coordination, and Competition

The living wage (LW) movement is part of the fight against forced labor: It aims to ensure that workers receive an income that can cover their daily subsistence needs. Our study expands the current understanding of LW pay by shifting from the traditional labor-capital view to an operations and supply chain management perspective. We use a game theoretical approach to explore the different responses of two competing supply chains to LW accreditation. We find that a moderate LW standard allows for Pareto optimality where key stakeholders (i.e., manufacturers, retailers, consumers, and workers) have a collective interest in promoting the LW movement. From a multistakeholder lens, the LW movement is only sustainable if the LW standard is neither too aggressive nor too conservative. We further demonstrate the following points. (1) Not all types of uncertainties are harmful to supply chains with LW pay. Yield uncertainty slows down the progress of the LW movement, whereas demand uncertainty encourages the voluntary adoption of LW pay among all stakeholders. (2) Supply chain coordination may slow the adoption of voluntary LW pay, which implies that the classic coordination paradigm is not a panacea in alleviating the plight of underpaid workers. (3) From the perspective of competition intensity, greater monopsony power hinders the progress of the LW movement, and we provide evidence for the positive effects of a competitive environment on incentivizing voluntary LW pay.

Effects of green supplier integration and development in competing supply chains

AbstractThis work develops a Cournot game model to study two competing supply chains, each consisting of one manufacturer and one supplier, producing and selling substitutable green products. The manufacturers decide whether to adopt the green supplier integration (GSI) strategy and the green supplier development (GSD) investment level to improve the product greenness degree. The interaction between the GSD decisions and the GSI strategies are analyzed with different manufacturer GSD capacities and market greenness sensitivity. The results indicate that the manufacturer with a higher GSD capacity will always adopt the GSI strategy to maximize GSD investment level or profit, and the manufacturer with a lower GSD capacity decides whether to adopt the GSI strategy by comparing the GSD capacities of the two manufacturers. The game model is extended from dedicated sourcing to diversified sourcing and hybrid sourcing to obtain optimal sourcing options jointly reached by the two manufacturers. Under these extensions, the GSI strategy always leads to higher GSD investment levels, and adopting the GSI strategies by both manufacturers becomes the only Nash equilibrium strategy combination. Manufacturers choose different sourcing options by judging the difference in their GSD capacities under different criteria, and choose hybrid sourcing when their GSD capacity gap is sufficiently large in a weakly competitive market.

Critical Role of Coopetition Among Supply Chains for Blockchain Adoption: Review of Reviews and Mixed-Method Analysis

The major purpose of this study is to investigate the role of coopetition among supply chains in blockchain adoption leading to sustainability in supply chains. This research uses a three-step process. First, a review of reviews is conducted to search the variables that would positively influence adoption of blockchain in supply chain. In the second step, total interpretive structural modeling (TISM) was utilized to understand the relationships among the enablers. Following the qualitative phase, an empirical study was conducted to test the hypotheses related to the mediating role of coopetition. Review of reviews identified 17 variables that can positively influence blockchain adoption in supply chain. The findings of TISM model revealed the hierarchical relationship among the enablers of blockchain adoption for supply chain management based on their relative importance. The results of the SEM-based study indicated that ‘coopetition’ plays a mediating role between the driver and dependent variables leading to sustainable supply chain. The research offers practical insights to integrate blockchain application in the supply chains leading to better supply chain transparency and ultimately sustainability. The research would support managers to develop suitable strategies to strengthen mechanism to enhance coopetition among competing supply chain to realize the benefits of emerging technologies. The originality of the study lies in the study of variables that influence blockchain adoption in supply chain using a mixed-method approach. Further, the research establishes the critical role of coopetition in achieving the benefits of blockchain adoption.

Towards a unified theory of supply chain value creation and capture

The value provided to market by competing supply chains determines success. Thus, a comprehensive understanding of how supply chains create and distribute this value is paramount. The purpose of this research is to synthesis the value creation and value capture concepts in a supply chain context. A case study of an extended agribusiness supply chain is used to empirically explore how value is created and captured with a specific focus on the interplay of the two concepts. The results identify the core value creation drivers and enablers, and value appropriation mediators that determine the net value capture of a supply chain. Insights from the exploratory case study are synthesised into an overarching model. Identification of the symbiotic relationship of value creation and value capture advances our knowledge beyond current discrete conceptualizations. By drawing upon value theory and the empirical insights, the proposed unified theory provides novel implications for theoreticians and managerial decision makers.

Financing strategies and government incentives in a competing supply chain with Trading-Old-for-Remanufactured programs

Financing strategies and government incentives in a competing supply chain with Trading-Old-for-Remanufactured programs

Decarbonizing innovation investment strategy in competing supply chains considering technology spillovers and environmental regulation

Decarbonizing innovation plays a significant role in curbing carbon emissions, allowing a firm to meet governmental environmental regulations and gain a competitive edge. However, innovation uncertainty and technology spillovers deter a firm from doing so. This paper studies the issue of firms’ decarbonizing innovation investment in a competing market under carbon emission regulation. We construct game-theoretic models of two competing supply chains, each consisting of a manufacturer and a retailer. Either manufacturer has the opportunity to invest in decarbonizing innovation, but she may fail in the end. According to the manufacturers’ innovation investment decisions, several subcases with no investment, unilateral decarbonizing investment, and bilateral decarbonizing investment are explored. The results show that when both manufacturers have a strong absorbing capacity, neither invests in decarbonizing innovation; when they are weak in absorbing external technology, bilateral decarbonizing investment exists. The findings also reveal that unilateral decarboning investment dominates when the probability of innovation success is moderate. There is a case in which both manufacturers do not conduct decarbonizing investment, although the probability of innovation success is high. In addition, we also find that a retailer can make more profit if his upstream manufacturer invests in decarbonizing innovation than in the no-investment scenario. However, he is harmed by bilateral decarbonizing investment if his upstream manufacturer is weak in absorbing external knowledge relative to the case of unilateral decarbonizing investment. Our results elucidated how technology spillovers and the stochastic nature of innovation affect a manufacturer’s decarbonizing innovation investment strategy in a competitive environment.

Traceability strategy choice in competing supply chains based on blockchain technology

AbstractBlockchain can help reduce fraud and improve visibility and traceability in supply chains. It has attracted significant investments in commercial practices, especially in the luxury industry. With the recent upgradation of consumption worldwide, consumers care more about the source of information and the value of products. Will tracing products using blockchain technology help competing luxury brands gain consumer trust and cultivate new competitive advantages? This paper proposes a supply chain model comprising two competing manufacturers selling online through retail or direct channels. It also explores whether and how manufacturers implement traceability strategies, including building traceability systems or joining third‐party blockchain platforms, considering blockchain's traceability. The results show that, when only one party adopts the traceability strategy, being the first mover to join a third‐party blockchain platform with high traceability is always beneficial for improving the profits of all parties. In this scenario, the blockchain platform should adopt as high traceability as possible. When both parties choose to trace the product source, a win–win strategy for them is to join third‐party blockchain platforms with low traceability. In this scenario, the untraced party is motivated to implement a traceability strategy. Furthermore, if consumer perceptions of traceability are high, an untraced manufacturer can obtain higher profits using the traceability strategy. Otherwise, low consumer perception of traceability leads to low‐price competition, which is harmful to luxury brands.

Optimal integration and bargaining decisions in asymmetric competing supply chains under virtual bargaining

This study examines the effects of asymmetric settings and horizontal interaction under three strategies with and without virtual bargaining, including vertical integration (VI), manufacturer’s Stackelberg (MS), and bargaining (BW) strategies—on channel members’ strategy selection in a competing supply chain (CSC) system. We also consider the effect on the performance of channel members, the overall channel, and the entire supply chain. The analysis focuses on whether a manufacturer should adopt a VI or BW strategy compared with the MS strategy. Without virtual bargaining, some counterintuitive results show that manufacturers always choose the VI strategy, but more intense competition could cause them to be trapped in a prisoner’s dilemma. It is known that the BW strategy enables channel members to achieve Pareto improvement, but we find that manufacturers will only choose it under a BW strategy with retailers’ subsidies. With virtual bargaining, we obtain similarly counterintuitive results. Overall, virtual bargaining, horizontal interaction, and asymmetric settings have a minor effect on strategy selection, while having notable ramifications for the performance of channel members, the overall channel, and the entire supply chain. Interestingly, competition between different channels as well as the double-marginal effect within a channel can be reduced by virtual bargaining. Most notably, when compared with the MS and VI strategies, virtual bargaining has the least negative effects on consumer utility and social welfare under the BW strategy.

Remanufacturing and Product Recovery Strategies Considering Chain-to-Chain Competition and Power Structures

In addition to its economic potential and environmental significance, remanufacturing shows strategic importance in competition. Product recovery, a fundamental part of the remanufacturing system, should be aligned with the competition between supply chains. Moreover, the power structure of the supply chain influences interactive decisions. In this study, we investigate how supply chain competition and power structure influence product recovery strategies. We model the problem in two competing supply chains, where the manufacturers sell products through the respective retailers. Either manufacturer can choose between two product recovery strategies: collecting the used products for remanufacturing directly (that is, direct recovery) or assigning the task of product recovery to the retailer (indirect recovery). In addition, we conduct full-blown exploration of the impact of power structures, including Stackelberg-Manufacturer as the leader, Stackelberg-Retailer as the leader, and vertical Nash. The results reveal the joint inter- and intra-channel implications of the product recovery strategies.

Data capital investment strategy in competing supply chains

Data capital investment strategy in competing supply chains

Strategies in supply chain competition: A game theoretic approach

In competitive markets for substitutable products it is essential for firms to develop appropriate strategies to sustain competition. This research focuses on the strategies of quality production, product pricing and marketing efforts. The competition between substitutable products is modelled by considering two competing supply chains, each with a manufacturer and a retailer. A supply chain game is developed in which the two manufacturers move first and retailers move next. The horizontal competition between the two manufacturers is modelled as a simultaneous move game, similar is the case with the retailers. The vertical competition between the manufacturer and the retailer in each supply chain is modelled as a manufacturer led Stackelberg game in which the manufacturer optimally decides the quality level of production. The retailer responds by optimally deciding the retail price of the product and the extent of marketing efforts to be undertaken. The findings of this study indicate that the quality level of the product increases with competition intensity among the supply chains. Comparisons with the centralized setting and monopolistic markets are also performed. Finally the competition between supply chains in an environment of asymmetric information about the manufacturer’s cost for quality production is made.

Price authority and information sharing with competing supply chains

We characterize the degree of price discretion that two competing manufacturers grant their retailers in a framework where demand is uncertain and privately observed by the retailers, while manufacturers only learn it probabilistically. In contrast with the consolidated vertical contracting literature, we assume that manufacturers cannot use monetary incentives to align the retailers’ incentives to pass on their unverifiable distribution costs to consumers. Our objective is to study how, in this context, an information-sharing agreement according to which manufacturers share their demand information affects prices, profits and consumer surplus. While equilibria with full price delegation never exist, regardless of whether manufacturers share information, partial delegation equilibria may exist with and without the exchange of information. These equilibria feature binding price caps (list prices) that prevent retailers from passing on their distribution costs to consumers, and are more likely to occur when manufacturers exchange demand information than when they do not share this information. Manufacturers profit from exchanging demand information when products are sufficiently differentiated, and retailers’ distribution costs are high enough. Yet, expected prices are unambiguously lower when manufacturers exchange demand information than when they don’t, making the information exchange beneficial to consumers.