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Logistics Service Supply Chain Vertical Integration Decisions under Service Efficiency Competition

Author

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  • Xiaomeng Zhang

    (School of Economics and Management, Beijing Jiaotong University, Beijing 100044, China)

  • Qilan Zhao

    (School of Economics and Management, Beijing Jiaotong University, Beijing 100044, China)

  • Jianjun Zhang

    (College of Economics and Management, Inner Mongolia Agricultural University, Hohhot 010010, China)

  • Xiongping Yue

    (School of Management, Wuhan Polytechnic University, Wuhan 430048, China)

Abstract

In the logistics sector, price competition is no longer the only form of horizontal competition between logistics service integrators; instead, it frequently takes the form of service efficiency competition among chains. Facing fierce market competition, vertical resource integration gradually becomes the trend in logistics industry integration. Using the inverse derivation method and comparative analysis, this study examines the relationship between the overall profit of its chain and that of the rival chain under service efficiency competition with or without the integration strategy. Furthermore, it builds two parallel competition logistics service supply chain models based on the inter-chain Nash competition and Stackelberg game of the chain members. The study results demonstrate that when the cost per unit of service efficiency is fixed, the greater the intensity of competition between chains, the more managers should tend to choose an integration strategy to maximize their profits. More interestingly, we find that the optimal integration decision of the supply chain is independent of the competitive intensity when the cost required to improve the unit service efficiency is extremely high.

Suggested Citation

  • Xiaomeng Zhang & Qilan Zhao & Jianjun Zhang & Xiongping Yue, 2023. "Logistics Service Supply Chain Vertical Integration Decisions under Service Efficiency Competition," Sustainability, MDPI, vol. 15(5), pages 1-23, February.
    • Handle: RePEc:gam:jsusta:v:15:y:2023:i:5:p:3915-:d:1075629
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    2. Xiaomeng Zhang & Jianjun Zhang & Xiongping Yue & Wenjun Qian, 2023. "The Impact of Green Technology Investment Levels on Competitive Supply Chain Integration Decisions," Sustainability, MDPI, vol. 15(13), pages 1-26, June.

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