IDEAS home Printed from https://ideas.repec.org/a/pal/jorsoc/v66y2015i12p2092-2101.html
   My bibliography  Save this article

The more the better? Optimal degree of supply-chain cooperation between competitors

Author

Listed:
  • Hubert Pun

    (University of Western Ontario, Ontario, Canada)

Abstract

We consider the outsourcing strategy problem of two competing original equipment manufacturers (OEMs) whose products are each made up of two components. The OEMs have different specializations, and therefore the component that each firm can produce in-house is different. Each firm must decide whether to outsource the other component to the competing OEM or to a third-party supplier. Prior research has demonstrated that competitors can be better off cooperating as supply-chain partners; therefore, one might expect that, as long as the OEMs are not at a severe cost disadvantage, they should maximize their cooperation as supply-chain partners, especially when competition between products is strong. Interestingly, this study finds that more cooperation between competitors may actually be harmful. Under certain conditions, while one of the OEMs should outsource to the competing firm, the other should outsource to a third-party supplier, even when the third-party supplier is more expensive and the competition is intense.

Suggested Citation

  • Hubert Pun, 2015. "The more the better? Optimal degree of supply-chain cooperation between competitors," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 66(12), pages 2092-2101, December.
    • Handle: RePEc:pal:jorsoc:v:66:y:2015:i:12:p:2092-2101
    as

    Download full text from publisher

    File URL: http://www.palgrave-journals.com/jors/journal/v66/n12/pdf/jors201540a.pdf
    File Function: Link to full text PDF
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: http://www.palgrave-journals.com/jors/journal/v66/n12/full/jors201540a.html
    File Function: Link to full text HTML
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Katsaliaki, Korina & Kumar, Sameer & Loulos, Vasilis, 2024. "Supply chain coopetition: A review of structures, mechanisms and dynamics," International Journal of Production Economics, Elsevier, vol. 267(C).
    2. Prasenjit Mandal & Tarun Jain & Abhishek Chakraborty, 2021. "Quality collaboration contracts under product pricing strategies," Annals of Operations Research, Springer, vol. 302(1), pages 231-264, July.
    3. Wei, Shanting & Zhang, Zhuo & Ke, Ginger Y. & Chen, Xintong, 2019. "The more cooperation, the better? Optimizing enterprise cooperative strategy in collaborative innovation networks," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 534(C).
    4. Li, Dan & Chen, Jing & Liao, Yi, 2021. "Outsourcing strategy in the presence of the customer returns," International Journal of Production Economics, Elsevier, vol. 240(C).
    5. Fu, Xiao & Tan, Guofu, 2024. "Double markups under bilateral vertical contracting," Economics Letters, Elsevier, vol. 237(C).
    6. Yasuhiro Arai & Noriaki Matsushima, 2023. "The impacts of suppliers and mutual outsourcing on organizational forms," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 56(1), pages 114-132, February.
    7. Negoro, Kazuhiro & Matsubayashi, Nobuo, 2021. "Game-theoretic analysis of partner selection strategies for market entry in global supply chains," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 151(C).
    8. Sarat Kumar Jena & Abhijeet Ghadge, 2022. "Product bundling and advertising strategy for a duopoly supply chain: a power-balance perspective," Annals of Operations Research, Springer, vol. 315(2), pages 1729-1753, August.
    9. Li, Wei & Zhao, Xuan, 2022. "Competition or coopetition? Equilibrium analysis in the presence of process improvement," European Journal of Operational Research, Elsevier, vol. 297(1), pages 180-202.
    10. Pun, Hubert & Ghamat, Salar, 2016. "The value of partnership under competition: When competitors may be R&D joint-venture and supply-chain partners for a critical component," International Journal of Production Economics, Elsevier, vol. 177(C), pages 1-11.
    11. Cheng, Yongwei & Fan, Tijun, 2021. "Production coopetition strategies for an FV automaker and a competitive NEV automaker under the dual-credit policy," Omega, Elsevier, vol. 103(C).

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pal:jorsoc:v:66:y:2015:i:12:p:2092-2101. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.palgrave-journals.com/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.