How Retailer Co-Opetition Impacts Pricing, Collecting and Coordination in a Closed-Loop Supply Chain

Abstract

The cooperative and competitive (i.e., co-opetition) behavior between retailers plays a significant role in the development of operations and marketing strategies in a supply chain. Specifically, retailers’ co-opetition relationship pivotally influences the sustainable performance in a closed-loop supply chain. This study examines the impact of retailer co-opetition on pricing, collection decisions and coordination in a closed-loop supply chain with one manufacturer and two competing retailers. Based on observations in some industries (e.g., electronic manufacturing, fabric and textile, etc.), the cooperative and competitive relationships between retailers can be classified into the following three different modes: Bertrand competition, Stackelberg competition, and Collusion. In this paper, we establish a centralized and three decentralized game-theoretic models under these three co-opetition modes and characterize the corresponding equilibrium outcomes. The results indicate that the Bertrand competition mode yields the highest return rate, which is also superior to the other two modes for both the manufacturer and the supply chain system in terms of profitability. However, it can be shown that which mode benefits the retailers would depend on the degree of competition between the retailers and the relative remanufacturing efficiency. Interestingly, we find that the retailer’s first-move advantage does not necessarily lead to higher profits. In addition, we design a modified two-part tariff contract to coordinate the decentralized closed-loop supply chains under three different retailer co-opetition modes, and the results suggest that the optimal contractual parameters in the contracts highly rely on the remanufacturing efficiency and the competition degree between the two retailers. Several managerial insights for firms, consumers and policy makers are provided through numerical analysis.

Research on Co-Opetition Mechanism between Pharmaceutical Enterprises and Third-Party Logistics in Drug Distribution of Medical Community

“…Yang, W et al (2022) studied the co-opetition strategy between the manufacturer of a proprietary component (MPC) and the original equipment manufacturer (OEM), analyzed the optimal cooperation strategy of MPC, and showed that the existence of third-party suppliers was the key factor in their competition and cooperation behavior through the model [17]. Li, X et al (2021) found that the retailer's profit was the largest under the Bertrand competition mode through the equilibrium solution by establishing the centralized and decentralized game-theoretic models under the Bertrand competition, Stackelberg competition, and collusion competition modes [18]. Co-opetition behavior is rarely included in research on the pharmaceutical supply chain.…”

The bundling sales pricing strategy of the closed-loop supply chain under patent protection

“…In order to implement the "Circular Economy Promotion Law" and promote a resourcesaving and environment-friendly society, as early as 2010, the National Development and MSCRA 6,2 Reform Commission of China indicated that remanufacturing is an advanced form of "reuse" in the circular economy. However, researches on remanufacturing usually focus on product recycling channels and strategies (Pal and Sarkar, 2021;Pan and Lin, 2021), product pricing decision and coordination (Lang and Jia, 2021;Li et al, 2021a, b), emission reduction and technologies (Chen et al, 2022;Li et al, 2021a, b;Yilmaz et al, 2021), and so on, but relatively little on the sales of remanufactured products.…”

“…However, researches on remanufacturing usually focus on product recycling channels and strategies (Pal and Sarkar, 2021; Pan and Lin, 2021), product pricing decision and coordination (Lang and Jia, 2021; Li et al. , 2021a, b), emission reduction and technologies (Chen et al ., 2022; Li et al. , 2021a, b; Yilmaz et al ., 2021), and so on, but relatively little on the sales of remanufactured products.…”

Improving the sustainability of fruit and vegetable supply chains in Ecuador : The role of organization and coordination

“…Experts agree that transforming agri-food supply chains into sustainable systems requires a coordinated approach along the chain (Raimondo et al, 2021). Coordination aims at improving joint performance by aligning individual actors' strategies (Li et al, 2021) and a lack of coordination complicates the achievement of shared objectives (Dries & Swinnen, 2007). Chain coordination is therefore seen as a prerequisite for promoting sustainability-oriented performance in supply chains.…”