Two Subcontracting Systems and Competitive Advantage
- Authors: Dong Joon Lee, Tatsuhiko Nariu, Tatsuya Kikutani3
-
View Affiliations Hide Affiliations3 Faculty of Management, Nagoya University of Commerce and Business, 4 4 Sagamine Komenoki-cho Nisshin-shi, Aichi 470-0193, Japan.
- Source: Firms' Strategic Decisions: Theoretical and Empirical Findings: Volume 1 , pp 3-25
- Publication Date: April 2015
- Language: English
Two Subcontracting Systems and Competitive Advantage, Page 1 of 1
< Previous page | Next page > /docserver/preview/fulltext/9781681080383/chapter-1-1.gif
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.
-
From This Site
/content/books/9781681080383.chapter-1dcterms_subject,pub_keyword-contentType:Journal -contentType:Figure -contentType:Table -contentType:SupplementaryData105
