Sourcing under competition: The implications of supplier capital constraint and supply chain co-opetition

Chaocheng Gu, Juan Wei and Ying Wei

Transportation Research Part E: Logistics and Transportation Review, 2021, vol. 149, issue C

Abstract: This paper investigates a manufacturer’s strategic sourcing and supplier financing strategies under downstream horizontal competition and co-opetition. When the manufacturer and the rival engage in a simultaneous-move game, we show that the manufacturer should always exclusively source from and offer finance to a cost-advantageous supplier if the latter is severely capital-constrained. If the supplier is moderately capital-constrained, however, the manufacturer’s preferred sourcing strategy depends on the type of the backup supplier, which leads to a horizontal competition or co-opetition structure. We also examine the robustness of the results by studying the sequential-move game.

Keywords: Supply chain finance; Financing supplier; Dual sourcing; Co-opetition (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (9)

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DOI: 10.1016/j.tre.2021.102262

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