Coopetition Strategy and Decision Analysis for Smart Phone Firms: Company A & Company S
Date Issued
2015
Date
2015
Author(s)
Tsai, Pei-Chun
Abstract
Existing researches on relationships between firms focus either on competitive or on cooperative relationships. However, in recent years, especially in high-tech industry, many firms cooperate and compete simultaneously, that is so-called “Coopetition”. In coopetitive relationship, any member’s action or decision will have impact on others, which forms a “game” in the supply chain. Although many scholars have already used game theory to discuss different topics in supply chain, such as inventory, production and pricing, few researches investigate coopetition and common patent infringement in high-tech industry. All of these motivated me to do this study. This paper uses two leading high-tech firms Company A and Company S as study case. Both compete vigorously in smart phone market, but Company S is one of major component suppliers for Company A. That’s why Company A falls in a dilemma when faces with patent infringement from Company S. This work tries to construct a two-stage game-based model for each possible strategic portfolio of Company A by utilizing the Stackelberg model and Nash bargaining game. In Stage1, we seek the negotiation solution (i.e.,W1 ) for cooperative agreements between them. Based on the output of cooperative agreements, Company A production quantities are determined in Stage2. Finally, we discuss which strategic portfolio will maximize Company A’s profit. We do in-depth discussions and comparisons using the results of numerical illustration and sensitivity analysis. The results also indicate that this proposed model can effectively support Company A’s decisions. This work tries to give some practical and managerial suggestions, which might help other high-tech firms make better decisions when they face with similar conditions.
Subjects
Supply chain management
Coopetition
Patent infringement
Stackelberg model
Nash bargaining game
Type
thesis
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