Firms’ Co-opetition Strategies And Decision-Making Incentives Confronting Supply Chain Instability

In recent years,global supply chains have faced frequent disruptions in terms of raw material supply,manufacturing,and logistics distribution due to international trade friction,Covid 19,the Russia-Ukraine war,and other major emergencies.These disruptions have seriously threatened the resilience and security of China’s industrial chain and supply chain.Therefore,designing response strategies to enhance the stability of the supply chain has become a hot topic in both academia and industry.The 20 th Party Congress Report and the Central Economic Work Conference have highlighted the need to enhance the resilience and security of supply chains by ensuring China’s industrial division of labor cooperation and competitiveness in the game of big powers.To this end,both the National Natural Science Foundation of China and the National Social Science Foundation of China have set up major projects related to supply chain resilience and security.These projects emphasize the scientific significance and urgency of research in this area,with a special emphasis on the impact of the complex relationship between supply chain parties competing and cooperating(Co-opetition)in the guidelines.Therefore,starting from the three key functional aspects of supply chain procurement,production and logistics,this dissertation focuses on the interaction between the decisions made by Chinese firms under the competitive and cooperative structure and the supply chain instability,and then analyzes the decision-making motives,benefit performance,and the form of co-opetitive strategies of the supply chain members.The findings of this dissertation will provide valuable insights for firms to make high-quality strategic decisions in the face of various stochastic risk shocks.This will help ensure the supply chain resilience and security of China’s supply chains.The research content and main findings of this dissertation are summarized as follows:(1)Based on the context where the brand owner suffers disruptions caused by environmental policy changes and other factors in global sourcing,this dissertation investigates the overseas sourcing strategy with disruption risks and local-overseas dual-sourcing strategy under the co-opetitive structure,and analyzes the strategic decision on chain-to-chain competition and co-opetitive strategy under dual-sourcing.This dissertation highlights three significant effects resulting from co-opetitive decisions under dual-sourcing strategy: price increase effect,competition effect,and re-allocation effect.The interaction between these effects are examined to explain the preferences of the brand owner and local manufacturer for different sourcing strategies.The price increase effect and the re-allocation effect vividly represent the strategic wholesale price increase by the local manufacturer and the countermeasures of the brand owner under the co-opetition structure.The study also reveals that the local manufacturer supplying raw materials to the brand owner may lead to a loss of profit when the brand owner faces greater risk of overseas sourcing.This is primarily due to the countermeasure of re-allocation effect taken by the brand owner and the weakened competition effect force the local manufacturer to focus solely on product sales in downstream markets.Notably,this dissertation finds that when the brand owner faces a higher risk of overseas sourcing disruption,the local manufacturer may incur a loss of profit if it provides raw materials to the brand owner.This is due to the countermeasures implemented by the brand owner through re-allocation effect and the weakening of the competitive effect.Therefore,the local manufacturer is better off focusing on selling products in downstream market instead of supplying raw materials to the brand owner.(2)The dissertation examines the strategic decision of a remanufacturer with unstable production quality to seek quality certification for its refurbished products from brand owners in the remanufacturing industry.A chain-to-chain competition and a co-opetitive model based on quality certification are constructed.Through analyzing and comparing the operational decisions of the remanufacturer and the brand owner under two scenarios,this dissertation identifies two effects brought by the co-opetition structure: the marginal profit effect and the order quantity effect.The strengths of these two effects vary with the intensity of competition between the refurbished and brand-new products.Particularly,the order quantity effect turns into a positive force in favor of increasing the remanufacturer’s profit when the competition is very intense.Meanwhile,under the impacts of the margin profit effect,the marginal profit increase due to quality certification drives the incentive alignment regarding quality certification to be achieved.(3)A two-dimensional competition game theoretical model of "product + logistics service" is constructed to explore the strategic co-opetitive decision of whether an e-commerce platform with stable logistics service should share its logistics service to a competitor with unstable logistics service.This dissertation finds that the logistics service fee shows a convex pattern with respect to the intensity of competition,reflecting the trade-off between the revenue from logistics service fee and the revenue from downstream product sales for the e-commerce platform with stable logistics services.The optimal strategy for the e-commerce platform with stable logistics services is to reduce the logistics service fee to maintain the demand for logistics services when competition intensifies.However,when competition is very intense,raising the logistics service fee to protect the revenue from its downstream products becomes its optimal choice.The study further reveals that using competitor’s shared logistics services is profitable for e-commerce with unstable logistics service only when the competition is moderately intense.The main driving force behind this is that logistics service fees are relatively low when competition is moderately intense.Therefore,when the downstream competition is moderately intense,a co-opetitive strategy based on logistics service sharing can achieve a win-win situation for competing e-commerce platforms while improving the stability of e-commerce logistics services.