Publication Type

Journal Article

Version

submittedVersion

Publication Date

8-2019

Abstract

Motivated by Google’s technology specifications on Android devices, we consider firms’ decisions on production timing in a co-opetitive supply chain comprising a manufacturer and an original equipment manufacturer (OEM), where the manufacturer acts as the OEM’s upstream contract manufacturer and downstream competitor. We consider the market acceptance uncertainty of key product designs. If a firm decides to implement ex post production strategy (PS), it can delay the production until the market acceptance uncertainty of its product is resolved. Otherwise, ex-ante production strategy (AS) is implemented. We find that, due to the co-opetition, PS does not always benefit either the manufacturer or the OEM, because the value of delayed production is diminished as the competitor may commit a production quantity earlier under AS. Further, firms’ decisions on production timing are dependent on the degree of market acceptance uncertainty of their products and competition intensity. We find that both firms choose PS when uncertainty is high, while only one of them chooses PS when uncertainty is moderate or low. Interestingly, when the competition is intense, the manufacturer tends to choose PS, which can benefit from both the resolved market acceptance uncertainty and OEM’s early commitment of production quantity. © 2019 Production and Operations Management Society

Keywords

Co-opetition, Market acceptance, Production timing, Technology specifications

Discipline

Operations and Supply Chain Management | Technology and Innovation

Research Areas

Strategy and Organisation

Publication

Production and Operations Management

Volume

28

Issue

8

First Page

1990

Last Page

2007

ISSN

1059-1478

Identifier

10.1111/poms.13031

Publisher

Wiley: 24 months

Copyright Owner and License

Authors

Additional URL

https://doi.org/10.1111/poms.13031

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