The role of co-opetition in low carbon manufacturing

T his study examines the strategic choices of two rival manufacturers between competition and coopetition. A complex relationship exists between these two firms, who manufacture substitutive products. In addition, each of these firms has an option to purchase (or sell) a key component from (or to) the other. We develop a benchmark competition model and two coopetition models in which the manufacturers compete for end-customer demand while simultaneously collaborating on component production through wholesaling (wholesaling coopetition) or licensing (license coopetition). By comparing the equilibria of the competition model and two coopetition models, we find that the optimal strategy for coopetition is determined by not only the degree of product substitution but also the inter-firm power relationship in the negotiation of a cooperation contract (i.e., wholesale price and license fees) and the difference in production efficiency between the two manufacturers. Our research comprehensively examines how the external, relationship-specific, and internal factors affect firms' optimal strategy selection and suggests a broad set of decision outcomes. Our study provides important managerial implications that can be utilized as strategic guidance for firms to pursue coopetition in various business environments.

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“…, Luo et al. ). This concept has been extended to networks at the intra‐network (e.g., Gnyawali et al.…”

Section: Literature Reviewmentioning

confidence: 99%

Production Coopetition Strategies for Competing Manufacturers that Produce Partially Substitutable Products

Chen

Wang²,

Xia

2019

Production and Operations Management

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“…Arya et al [37] studied the influence of corporate social responsibility (CSR) subsidies on supply chain decision-making. Luo et al [38] studied the decision-making of enterprise competition and cooperation strategy considering carbon emission reduction technology under carbon trading policy. When the recovery rates are the same, Aksen D et al [39] analyzed the BP models under government support and legislation decision-making environments.…”

Section: Literature Reviewmentioning

confidence: 99%

Research on Two-Way Logistics Operation with Uncertain Recycling Quality in Government Multi-Policy Environment

Tan

Guo

2019

Sustainability

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With the emphasis on environmental protection issues, countries have introduced a number of circular economy-related policies aimed at guiding enterprises to green development and green innovation. At the same time, they are encouraged to strengthen the combination of forward logistics and reverse logistics, providing an effective way to improve resource shortages and reduce environmental pollution. However, the quality of recycled products in reverse logistics is often uncertain, which not only increases the risk of production decisions of remanufacturers, but also affects the sales of new products in the forward logistics to a certain extent. Based on the uncertainty of recycling quality of waste products and the controllability of remanufacturing technology level, this paper studies the impact of various regulatory environments on the operation of a two-way logistics system. We solve the decision model of the system through game theory. The results show that the government’s policy can improve product recycling quality and remanufacturing technology. However, recycling rewards and punishments, remanufacturing technology subsidies, and recycling payment factors need to be within a certain range to ensure the effectiveness of the trading market. When the recycling regulation has been implemented, it is beneficial for manufacturers to choose to improve their remanufacturing technology level. This means that the combined effect of multiple policies is more conducive to the operation of a two-way logistics system.

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“…In terms of the carbon emission reduction decision-making, Du et al [13] found that market risk affects carbon emission reduction, while Tao et al [14] argued that different supply chain forms, such as closed-loop supply chains, also have an impact on carbon emission reduction. Luo et al [15] found that, under the cap-and-trade policy, coopetition will bring more profits and less total carbon emissions to the two manufacturers. Rao et al [16] suggested that changes in carbon tax will have an impact on the optimal choice of emission reductions, and, with the increase of carbon tax, carbon emission reductions will present a nonlinear emission reduction trend.…”

Section: Literature Reviewmentioning

confidence: 99%

A Study on Supply Chain Emission Reduction Level Based on Carbon Tax and Consumers’ Low-Carbon Preferences under Stochastic Demand

Wang

Qin

2019

Mathematical Problems in Engineering

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This article focuses on the level of supply chain emission reduction, taking into account consumers’ low-carbon preferences, stochastic market demand, and carbon tax policy. By introducing the emission reduction penalty mechanism and adopting reverse derivation method, it derives the revenue model of the retailer and the manufacturer in decentralized and centralized supply chain when the supply chain reduces emissions or is not under stochastic market demand. The research results are as follows. (i) The optimal retailer’s revenue is strictly monotonous increasing with respect to the consumers’ low-carbon preferences in the decentralized supply chain. However, in the centralized supply chain, the optimal revenue of the retailer and the manufacturer are strictly monotonously decreasing of the consumers’ low-carbon preferences respectively. (ii) The retailer’s revenue is a concave function of the order quantity, and there exists a unique order quantity that can maximize retailer’s revenue. The manufacturer’s revenue is a concave function of the wholesale price, and there exists a unique wholesale price that can maximize manufacturer’s revenue. (iii) When consumers’ low-carbon preferences are given, there is an optimal emission reduction level that maximizes the overall revenue of the supply chain. Furthermore, as the carbon tax increases, the optimal emission reduction level gradually rises. (iv) As the level of emission reduction in the supply chain increases, the range of the revenue sharing coefficient becomes larger, and it is easier for supply chain members to reach a revenue sharing contract. However, when consumers’ low-carbon preferences and carbon tax increase, the opposite is true.

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The role of co-opetition in low carbon manufacturing

Cited by 196 publications

References 52 publications

Production Coopetition Strategies for Competing Manufacturers that Produce Partially Substitutable Products

Production Coopetition Strategies for Competing Manufacturers that Produce Partially Substitutable Products

Research on Two-Way Logistics Operation with Uncertain Recycling Quality in Government Multi-Policy Environment

A Study on Supply Chain Emission Reduction Level Based on Carbon Tax and Consumers’ Low-Carbon Preferences under Stochastic Demand

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