Rival Chains Research Articles

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 Impact of Green Technology Investment Levels on Competitive Supply Chain Integration Decisions

The current study focuses on vertical supply chain integration, with a special emphasis on the competitive environment of green investment markets and green investments. The current study investigates the relationship between the final product’s green service level and integration and non-integration methods within two separate supply chain models, namely the Nash competition and Stackelberg game models. To attain its goals, the study utilises an inverse derivation technique and comparative analysis. The current study investigates the best integration approach depending on the level of environmental investment in the supply chain’s final product. The findings revealed that the inter-chain rivalry in green investment and the sensitivity coefficient associated with green investment impacted the integration decisions of competing chains in the Nash competition. Furthermore, when the coefficient of the sensitivity to green investment was greater than 0.375, the choice to integrate logistics service supply chains in a horizontal Nash competition was independent of the amount of service competition intensity. In such cases, taking a different strategy than the rival chain might potentially increase the grade of eco-friendly services provided by one’s own chain.

Logistics Service Supply Chain Vertical Integration Decisions under Service Efficiency Competition

In the logistics sector, price competition is no longer the only form of horizontal competition between logistics service integrators; instead, it frequently takes the form of service efficiency competition among chains. Facing fierce market competition, vertical resource integration gradually becomes the trend in logistics industry integration. Using the inverse derivation method and comparative analysis, this study examines the relationship between the overall profit of its chain and that of the rival chain under service efficiency competition with or without the integration strategy. Furthermore, it builds two parallel competition logistics service supply chain models based on the inter-chain Nash competition and Stackelberg game of the chain members. The study results demonstrate that when the cost per unit of service efficiency is fixed, the greater the intensity of competition between chains, the more managers should tend to choose an integration strategy to maximize their profits. More interestingly, we find that the optimal integration decision of the supply chain is independent of the competitive intensity when the cost required to improve the unit service efficiency is extremely high.

Franchising contracts as routines: Untangling the adaptive value of incomplete contracts

Scant attention has been paid to the role of franchising contracts in the adaptation of franchise chains in prior franchising studies, which focus predominantly on how they safeguard against franchisee stores’ misbehavior. We conceptualize franchising contracts as a collection of routines, building on the theory of routines. We theorize how discrepancies between what a chain prescribes and how franchisee stores perform their day-to-day operations foster chainwide adaptation. Our model elaborates how—by shaping a chain’s effort to verify franchisee stores’ performance and coordinate with franchisee stores—contractual incompleteness influences chainwide adaptation. We use primary and secondary data from 281 US franchise chains to test these ideas. Our novel theoretical contribution is showing how franchising contracts’ incompleteness influences chainwide adaptation, which in turn propels its revenue growth beyond rival chains.

THE REGIONAL MARKET ENTRY AND STORE-NETWORK GROWTH OF CHAIN RETAILERS: THE CONVENIENCE STORE INDUSTRY IN JAPAN

THE REGIONAL MARKET ENTRY AND STORE-NETWORK GROWTH OF CHAIN RETAILERS: THE CONVENIENCE STORE INDUSTRY IN JAPAN

Decentralized supply chain network design: monopoly, duopoly and oligopoly competitions under uncertainty

This paper presents the competitive supply chain network design problem in which n decentralized supply chains simultaneously enter the market with no existing rival chain, shape their networks and set wholesale and retail prices in competitive mode. The customer demand is elastic and price dependent, customer utility function is based on the Hoteling model and the chains produce identical or highly substitutable products. We construct a solution algorithm based on bi-level programming and possibility theory. In the proposed bi-level model, the inner part sets the prices based on simultaneous extra- and Stackleberg intra- chains competitions, and the outer part shapes the networks in cooperative competitions. Finally, we use a real-word study to discuss the effect of the different structures of the competitors on the equilibrium solution. Moreover, sensitivity analyses are conducted and managerial insights are offered.

Information Sharing in Competing Supply Chains with Production Cost Reduction

We consider the problem of sharing demand information in two competing supply chains, each consisting of one manufacturer and one retailer. Information sharing allows a manufacturer’s wholesale price to respond to demand signal, which benefits the supply chain if the manufacturer is efficient in cost reduction and hurts it otherwise. It also allows a manufacturer’s cost reduction level to respond to demand signal, which always benefits the supply chain. A supply chain that engages in information sharing triggers a reaction from the rival chain. Such a reaction may benefit or hurt the first supply chain, depending on whether the retailers compete on quantity or price, and whether or not the manufacturers are efficient in cost reduction. With quantity competition, information sharing occurs when the manufacturers are efficient in cost reduction. It is more likely to occur when either information is less accurate or competition is less intense. With price competition, information sharing occurs when either competition is intense or the manufacturers are efficient in cost reduction. It is more likely to occur when information is more accurate. When information sharing is beneficial to a supply chain, a manufacturer can buy information from a retailer with a side payment, which is zero if the manufacturer is sufficiently efficient in cost reduction.The e-companion is available at https://doi.org/10.1287/msom.2016.0607 .

Simultaneous Decentralized Competitive Supply Chain Network Design under Oligopoly Competition

This paper discusses a problem in which decentralized supply chains enter the market simultaneously with no existing rival chains, shape the supply chains’ networks, and set wholesale and retail prices in a noncooperative manner. All the chains produce either identical or highly substitutable products. Customer demand is elastic and price-dependent. A three-step algorithm is proposed to solve this problem. Step one considers the supply chains’ potential network structures. Step two is based on a finite-dimensional variational inequality formulation and is solved by a modified projection method to determine equilibrium prices. Step three selects the equilibrium locations to shape the chains’ equilibrium network structure with the help of the Wilson algorithm. Finally, this approach is applied to a real-world scenario, and the results are discussed. Moreover, sensitivity analyses are conducted.

Simultaneous competitive supply chain network design with continuous attractiveness variables

A two-stage algorithm is developed for the competitive supply chain network design problem in which two competitors simultaneously enter the market with no existing rival chain, shape their networks, and set attractiveness of their opened distribution centres to maximize their profits. The customer behaviour is based on the Huff gravity-based rule.The proposed algorithm is constructed based on the Lemke and Howson algorithm and variational inequality formulation with the help of bi-level programming, the modified projection method, and the possibility theory. We derive the equilibrium condition and establish the finite dimensional variational inequality formulation, and provide properties of the equilibrium patterns in terms of the results of existence and uniqueness. Finally, we generate some instances and use a real world study to discuss the effect of the different structures of the competitors, namely centralized, decentralized, cooperative, or unknown modes, on the equilibrium solution.

Distribution Design of Two Rival Decenteralized Supply Chains: a Two-person Nonzero Sum Game Theory Approach

We consider competition between two decentralized supply chains network under demand uncertainty. Each chain consists of one risk-averse manufacturer and a group of risk-averse retailers. These two chains present substitutable products to the geographical dispensed markets. The markets’ demands are contingent upon prices, service levels, and advertising efforts of two supply chains. We formulate the distribution design problem of two rival chains as a two-person nonzero sum game. Since strategic decisions of distribution designs often have priority over tactical ones, we first calculate the equilibrium of tactical decisions for each pair of distribution design scenarios. Then, according to the presented methodology, we find Nash equilibrium solutions of distribution network scenarios for two rival chains. Eventually, the research has concluded with a numerical example in order to illustrate the real applications of the methodology.

Supply Chains Competition under Uncertainty Concerning Player’s Strategies and Customer Choice Behavior: A Generalized Nash Game Approach

Decision makers in a supply chain confront two main sources of uncertainty in market environment including uncertainty about customers purchasing behaviors and rival chains strategies. Focusing on competition between two supply chains, it is considered that each customer as an independent player selects products of these chains based on random utility model. Similar to quantal response equilibrium approach, we take account of customer rationality as an exogenous parameter. Moreover, it is assumed that decision makers in a supply chain can perceive an estimation of rival strategies about price and service level formulated in the model by fuzzy strategies. In the competition model, chain’s decision makers consider a subjective probability for wining each customer which is formulated by coupled constraints. These constraints connect chains strategies regarding to each customer and yield a generalized Nash equilibrium problem. Since price cutting and increasing service level are main responses to rival supply chain, after calculating optimal strategies, we show that more efficient responses depend on customer preferences.

Strategic design of competing supply chain networks with foresight

We consider models for duopolistic competitive supply chain network designing with sequential acting and variable delivered prices. These models design a multi-tier chain operating in markets under deterministic price-depended demands and with a rival chain present. The existing rival chain tends to open some new retailers to recapture some income in a near future. These rival chains' structures are assumed to be set ''once and for all'' in a sequential manner but further price adjustments are possible. This problem is modeled for each of the following two strategies: (1) the von Stackelberg strategy in which we assume the existing chain will choose its future entry sites in the way to optimize its market share. This problem is modeled by a linear binary bi-level program and solved by a combinatorial meta-heuristic. (2) the minimum regret strategy in which we assume the existing chain's future entry sites are totally unpredic, it is playing a ''game against nature''. This problem is modeled by linear binary programs.

Strategic design of competing centralized supply chain networks for markets with deterministic demands

This paper develops an equilibrium model to design a centralized supply chain network operating in markets under deterministic price-depended demands and with a rival chain present. The two chains provide competitive products, either identical or highly substitutable, for some participating retailer markets. We model the optimizing behavior of these two chains, derive the equilibrium conditions, and establish the finite-dimensional variational inequality formulation, and solve it using a modified projection method. We provide properties of the equilibrium pattern in terms of the existence and uniqueness results. Our model also considers the impacts of the strategic facility location decisions on the tactical inventory and shipment decisions. Finally, we illustrate the model through a numerical example and discuss how the prices, costs, incomes, and profits behave with respect to key marketing activities, such as advertising, brand positioning, and brand loyalty.