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To Transfer or Not? Analysis of the Original Equipment Manufacturer's Strategic Outsourcing Strategy in the Presence of the Supplier's Innovation Effort

原设备制造商 外包 产业组织 业务 生产(经济) 竞争优势 产品(数学) 降低成本 传输(计算) 制造工程 营销 微观经济学 经济 计算机科学 工程类 数学 几何学 并行计算 操作系统
作者
Pengwen Hou,Zihan Liu,Lei Xie,Shuhua Zhang
出处
期刊:IEEE Transactions on Engineering Management [Institute of Electrical and Electronics Engineers]
卷期号:71: 7341-7352 被引量:3
标识
DOI:10.1109/tem.2023.3277016
摘要

Recently, a new trend has arisen in which many original equipment manufacturers (OEMs) outsourced to traditional low-cost manufacturing bases (e.g., China) have started to transfer production to new emerging regions with even lower costs (e.g., Southeast Asia). However, it is still unclear whether and when OEMs should transfer to the new environment, especially when taking the traditional supplier's initial innovation effort into consideration. To address this question, we consider a sourcing game where one OEM sources from a traditional low-cost supplier that can be either competitive (CS) or noncompetitive (NS) initially. Moreover, both of these types of suppliers have the ability to innovate by themselves. Driven by the increasing cost pressure, the OEM may transfer to a new supplier (LS) that has an even lower cost but suffers yield uncertainty. The equilibrium results show that the OEM is less likely to transfer when its brand value is large enough. Interestingly, we find that the competition between the CS and OEM does not always prompt the OEM to transfer. When the brand advantage is large enough and the traditional supplier's unit production cost for the OEM is moderate, the OEM should not transfer under the CS scenario but should transfer under the NS scenario. Finally, we find that when the OEM's brand advantage increases, the effectiveness of innovation in preventing the OEM from transferring decreases under the CS scenario, while it increases under the NS scenario.
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