Duopoly Market-based Supply Chain Cooperation And Competition Policy

After 20 years of development, color TV industry in China has made significant achievements. But for domestic enterprises do not have the core technology to produce faceplates which accounts for 70% of the total cost, we only have a certain competitiveness in the manufacturing sector. All the raw-material we need dependent on Japanese and Korean companies, such as Samsung, SONY, LG and so on those who not only play the role of raw-material suppliers, but also competitors in television terminal market. Considering China's color TV market, we see Japanese and Korean companies'production department and domestic enterprises as competing manufacturers, the Japanese and Korean enterprises'raw-material production sectors as a supplier, we study a two-stage supply chain contains a single supplier and two competing manufacturers. Through research, we want to explain the phenomenon of China's color TV market and give some suggestion to the domestic enterprises.In our study, the supplier has cooperation opportunities with one of the competing manufacturers. We mainly consider co-opetitive strategy between them. When should the enterprise take non-cooperative attitude, and when to take co-operative attitude? And under different strategies which manufacturer will be in the market dominating position? To solve these questions we take an in-depth analysis by using quantitative methods. Based on linear demand-price function, we built up different models of supplier-manufacturer supply chain in identical market or differential market by using Bertrand game, Stackelberg game and the Cournot game model,compared each equilibrium solution of different combination of strategies, especially the market occupancy of each manufacturer.The study found that in identical market, when the supplier's unit cost, basic needs and the demand-sensitive factor are fixed, the volatility of the whole supply chain system is only relative to the difference between the cost; the equilibrium market share is inversely proportional to the cost of itself and proportional to the cost of its competitor; when the cost of co-operation manufacturer is lower, whatever strategy the supplier take the other manufacturer will be out of the market; the vertical integration strategy not always the best.The study also found that in differential market, the manufacturer with a lower recognition of market value always has a strong price advantage to get a relatively larger market share.The results show that compared with the Japanese and Korean companies, domestic TV manufacturers with lower manufacturing costs and lower recognition of market value have a relatively larger market share and the absolute advantage in the competitive position. However the domestic enterprises'competitive advantage only comes from machine manufacturing sector and its huge low-end user market. And the changes of the market will gradually weaken its competitive advantage. The only way to hold the competitive position is to enhance investments in technology in order to have their own core technology and raw-materials production line.