Counterfeit goods are becoming more sophisticated from shoes to infant milk powder and aircraft parts, creating problems for consumers, …rms, and governments. By comparing two types of counterfeiters -deceptive, so in…ltrating a licit (but complicit) distributor, or non-deceptive in an illicit channel, we provide insights into the impact of anti-counterfeiting strategies on a brand-name company, a counterfeiter, and consumers. Our analysis highlights that the e¤ectiveness of these strategies depends critically on whether a brand-name company faces a non-deceptive or deceptive counterfeiter. For example, by improving quality, the brand-name company can improve her expected pro…t against a non-deceptive counterfeiter when the counterfeiter steals an insigni…cant amount of brand value. However, the same strategy does not work well against the deceptive counterfeiter unless high quality facilitates the seizure of deceptive counterfeits signi…cantly. Similarly, reducing price works well in combating the non-deceptive counterfeiter, but it could be ine¤ective against the deceptive counterfeiter. Moreover, the strategies that improve the pro…t of the brand-name company may bene…t the counterfeiter inadvertently and even hurt consumer welfare.Therefore, …rms and governments should carefully consider a trade-o¤ among di¤erent objectives in implementing an anti-counterfeiting strategy.
Motivated by Google’s technology specifications on Android devices, we consider firms’ decisions on production timing in a co‐opetitive supply chain comprising a manufacturer and an original equipment manufacturer (OEM), where the manufacturer acts as the OEM’s upstream contract manufacturer and downstream competitor. We consider the market acceptance uncertainty of key product designs. If a firm decides to implement ex post production strategy (PS), it can delay the production until the market acceptance uncertainty of its product is resolved. Otherwise, ex‐ante production strategy (AS) is implemented. We find that, due to the co‐opetition, PS does not always benefit either the manufacturer or the OEM, because the value of delayed production is diminished as the competitor may commit a production quantity earlier under AS. Further, firms’ decisions on production timing are dependent on the degree of market acceptance uncertainty of their products and competition intensity. We find that both firms choose PS when uncertainty is high, while only one of them chooses PS when uncertainty is moderate or low. Interestingly, when the competition is intense, the manufacturer tends to choose PS, which can benefit from both the resolved market acceptance uncertainty and OEM’s early commitment of production quantity.
Problem definition: We investigate multinational firms’ inspection and pricing strategies to address the challenges of combating child labor in global supply chains. We also examine how several factors (such as information disclosure, goodwill loss, inspection cost, external monitoring by nongovernmental organizations (NGOs), and penalty scheme) affect firms’ incentives to use different strategies to combat child labor. Academic/practical relevance: Nearly 200 million children are engaged in child labor, many in developing countries that are part of the supply base of global manufacturing networks. However, there has been little research on evaluating the impact of firms’ strategies and NGOs’ initiatives on child labor. Methodology: We develop a game-theoretic model based on a two-tier supply chain, in which a multinational firm in a developed country sells the product made by a supplier in a developing country. Results: If internal inspections are economical, a global firm can reduce the incidence of child labor by inspecting the supplier’s use of child labor. Otherwise, the firm can deter the supplier’s child labor employment by offering a sufficiently high wholesale price or simultaneously using internal inspections and a medium wholesale price. The latter strategy should be adopted only when information about the firm’s inspection policy can be informed credibly. This strategy combats child labor more effectively when a higher penalty is levied onto the supplier’s use of child labor. Managerial implications: A multinational firm that adopts a zero-tolerance policy should consider disclosing its effort to combat child labor (e.g., through a social responsibility report), whereas it should take extra caution when using other penalty schemes. NGOs should help raise the firm’s goodwill cost (e.g., through campaigns and consumer education), but they should be careful about helping to reduce the firm’s inspection cost (e.g., by improving a monitoring system). To prevent children from going back to work after initial removal, a sufficient amount of compensation should be provided to those children, especially when firms rely on inspections without paying a high wholesale price to suppliers.
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