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Competing Through Innovation in Networked Manufacturing

Author

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  • Zilong Wang

    (College of Economics and Management, Nanjing University of Aeronautics and Astronautics, China)

  • Hechang Cai

    (College of Economics and Management, Nanjing University of Aeronautics and Astronautics, China)

Abstract

The authors examine how network externalities and various factors shape strategic interactions between manufacturers and technology suppliers in networked manufacturing contexts. Using an evolutionary game model, it explores manufacturers' radical vs. incremental innovation choices alongside suppliers' technology authorization vs. licensing strategies. The results show that both parties' strategies often fluctuate without stabilizing under different initial conditions. While higher returns from radical innovation motivate manufacturers toward breakthrough efforts, suppliers consistently favor licensing regardless of profit-sharing adjustments and are highly sensitive to radical innovation costs. In contrast, changes in licensing fees predominantly influence manufacturers' behaviors. Collaboration costs only lead to minor shifts in evolutionary trajectories.

Suggested Citation

  • Zilong Wang & Hechang Cai, 2025. "Competing Through Innovation in Networked Manufacturing," International Journal of Strategic Decision Sciences (IJSDS), IGI Global, vol. 15(1), pages 1-29, January.
    • Handle: RePEc:igg:jsds00:v:15:y:2025:i:1:p:1-29
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    References listed on IDEAS

    as
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    3. Chen, Xu & Wang, Xiaojun & Jing, Haojie, 2023. "Technology licensing strategies for three cost-differential manufacturers," European Journal of Operational Research, Elsevier, vol. 308(2), pages 622-635.
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    5. Xiaozhen Wang & Ki-Hyun Um & Shu Wang & Mingu Kang, 2023. "The mediating role of key supplier adaptability and involvement in the relationship between supplier relationship management and NPD project success," Operations Management Research, Springer, vol. 16(2), pages 794-807, June.
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