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Sourcing Strategy of Original Equipment Manufacturer with Quality Competition

机译：具有优质竞争的原始设备制造商的采购策略

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摘要

We develop game-theoretic models to study the sourcing strategy of an original equipment manufacturer (OEM) in the presence of a competing contract manufacturer (CCM). TheOEMsells the product in a high-quality brand and has three strategy options: producing the product in house or outsourcing production to either a CCM or a noncompeting contract manufacturer (NCM). At the same time, the CCM provides its own product in a low-quality brand. We show that when the product qualities are exogenous, the OEM’s sourcing strategy decision depends on the OEM brand’s efficiency in producing and selling the product (the difference between quality and production cost), relative to that of the CCM brand. Interestingly, the OEM may prefer outsourcing to a CCM to soften price competition, even though this will mean a higher wholesale price; the CCM also prefers to produce for the OEM, even though its total demand may decrease. When the product qualities are endogenous, however, with quality competition, the OEM prefers either insourcing or outsourcing to an NCM to increase quality differentiation, depending on its cost disadvantage in producing the high-quality product.
机译：我们开发游戏理论模型，研究原始设备制造商（OEM）的采购策略在竞争合同制造商（CCM）。 TheOemsells在高质量的品牌中的产品，有三种策略选择：在房屋或外包生产中生产产品，以CCM或非耐合同制造商（NCM）。与此同时，CCM在低质量品牌中提供自己的产品。我们认为，当产品质量外，OEM的采购策略决策取决于OEM品牌在生产和销售产品的效率（质量和生产成本之间的差异），相对于CCM品牌。有趣的是，OEM可能更愿意将外包给CCM来软化价格竞争，尽管这将意味着更高的批发价格; CCM也更喜欢为OEM生产，即使其总需求可能会降低。然而，当产品质量是内源性的，以质量竞争，OEM更喜欢批准或外包给NCM以增加质量分化，这取决于其生产高质量产品的成本劣势。

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