Skip to content
2000

Two Subcontracting Systems and Competitive Advantage

image of Two Subcontracting Systems and Competitive Advantage

This chapter compares two subcontracting systems in a three-stage duopoly model. An American-typed assembler such as GM generally produces an input internally, while a Japanese-typed assembler such as Toyota purchases it from its affiliated (Keiretsu) supplier. The American-typed assembler has the advantage of investment incentive, but has the disadvantage of the input price management. On the other hand, the Japanese-typed assembler has the advantage of the input price adjustment, but has the disadvantage of providing investment incentive for the affiliated supplier. Our results are as follows: if the Japanese assembler can support its affiliated supplier prior to purchasing the input, the support enables the assembler to purchase the input at a low price. As a result, the assembler has a competitive advantage in the final product market.

/content/books/9781681080383.chapter-1
dcterms_subject,pub_keyword
-contentType:Journal
10
5
Chapter
content/books/9781681080383
Book
false
en
Loading
This is a required field
Please enter a valid email address
Approval was a Success
Invalid data
An Error Occurred
Approval was partially successful, following selected items could not be processed due to error
Please enter a valid_number test