A Study On Firms' Coopetition: Based On R&D Collaboration And Supply Chain Management

In reality, firms often face inter-area, inter-industry, inter-culture, or inter-system problems in operational managements and strategic decisions. Then, firms in such a complex context form an organizational relationship in which cooperation and competition coexist. This relationship is called coopetition, which is still under-researched.In the literature on coopetition, there are two separate theories, called individual rationalization and collective rationalization. Yet, there is few study synthesizing these two theories and giving quantitative analysis. Since it is very important and meaningful to management practices for firms, we study the coopetition at firm level. By incorporating collective rationality with individual one, we find some theoretical results and practical insights based on R&D collaboration and supply chain management.In the thesis, we give quantitative analysis on firms' coopetition in R&D collaboration and in supply chain management, including horizontal coopetition with contract, vertical coopetition with contract, coopetition without contract, and a looser coopetitive relationship.Ⅰ. Horizontal coopetition with contractFirms in the same industry may cooperate in R&D activities while compete in the future market after R&D success. This is a familiar horizontal coopetition with contract in the literature. In this thesis, we mainly focus on two issues:(1) how to investigate the determinants of R&D cooperation systematically? and(2) how to rationalize firms' utilities to reveal the two incentives: cooperative and competitive?In this part, we study the strategic R&D collaboration by introducing a virtual player to reveal cooperative incentives, dispelling ante-symmetries, and keeping investment shares and market shares independent of each other. We show that high R&D investments must incur high market shares. Not consistently with the prevailing viewpoint, we also get two main findings as follows.(1) The superiority of the R&D cartel is due to the coexistence of cooperation and competition, i.e., the existence of the virtual player. Moreover, firms' inter-actions become more complex when the collective interests are considered, depending on the integration of multiple effects.(2) After introducing the firm-specific absorptive capacity and the cost-reducing function, we claim that the spillover level plays a dual but still significant role in deciding the R&D investment. Firms take different actions on the R&D investment when the spillovers axe endogenous. Namely, when firms in a RJV or a cartelized RJV increase the spillover level, whether or not they increase their investment with spillovers are determined by the firm-specific determinants such as the absorptive capacity, the market competition, the degree of risk-aversion, etc.Ⅱ. Vertical coopetition with contractWe study a two-level supply chain composed of an upstream firm and a downstream firm which cooperate in R&D while compete in production and retaining. Moreover, we mainly investigate:(1) the effects of the firm's bargaining power on his partner selection, and(2) how to select a cooperative mode.Under an extended setting, we prove the validity of several modes of R&D cooperation. extensively used in the literature, and solve how to select the mode. First, the equilibrium result on the partner selection is that the firms with close bargaining powers will form an R&D cartel, which in turn leads to equal weights in collective interests. Second, a firm selects an appropriate mode according to his technological contributions and his spillovers of knowledge.Ⅲ. Coopetition without contractIn this part, two levels of the coopetition are studied in a supply chain consisting of one manufacturer and one retailer. One is in the decision level where such decision variables as wholesale price, retailer price, order quantity, and advertising/sales efforts are involved. Here, the wholesale price is completely for competition while the advertising/sales efforts are completely for cooperation. But both of these two types of decisions coexist in the supply chain. The other level of the coopetition is in the utilities of the firms in the supply chain by introducing egoistic preferences for them. Then, each firm in the supply chain will consider not only his/her own profit but also his partner/competitor's profit. We call it coopetition scenario. Besides coopetition scenario, both the integrated(i.e., centralized) and the decentralized scenarios are also studied. We show the existence of Nash equilibria for these three scenarios, and obtain the Nash equilibria by solving a one-variable equation for both the manufacturer and the retailer. We show that the performance under the coopetition is a mediacy between those of the decentralization and the integration. We analyze the effect of the egoistic preferences on the Nash equilibria for the coopetition scenario. Finally, numerical analysis illustrated the relative results we obtained. Furthermore it is illustrated that it will be better for the supply chain and the retailer if the manufacturer is altruistic and the retailer is egoistic, and that it will be better for the supplier if she gives such policy as"share".Ⅳ. A looser coopetitive relationship Besides formal cooperation which depends on ex ante communications, firms can cooperate unformally through tacit understanding and agreement on social norms, culture, values, and beliefs, etc. Such a cooperation is called tacit cooperation, which has four significant characters: fuzzy behavior patterns, high dependence on subjects, duality, and decision decentralization. This paper shows that cooperative incentives come from not only reciprocal subordination (or the avoidance of reciprocal retaliation), but also the concern about the total profits. Therefore, a virtual player whose utility is the total profits is introduced. Furthermore, the contributive preferences to collaboration and theη-balanced strategic bundle are defined. By studying on the structure of the set of the contributive preferences to collaboration, we show that the set of firms' contributive preferences to collaboration is convex. Under some conditions, all of the optimal contributive preferences to collaboration must be in the same isometric super-surface of a convex function.All in all, it is one of our contributions to consider individual rationality and collective rationality simultaneously. By modeling and quantitatively analyzing the problems in R&D collaboration and in supply chain management, we give some meaningful theoretical and numerical results and some management insights, which are different with traditional opinions.