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Two‐period supply chain coordination strategies with ambidextrous sustainable innovations
Author(s) -
Kumar Patanjal,
Jakhar Suresh Kumar,
Bhattacharya Arijit
Publication year - 2021
Publication title -
business strategy and the environment
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.123
H-Index - 105
eISSN - 1099-0836
pISSN - 0964-4733
DOI - 10.1002/bse.2783
Subject(s) - business , supply chain , industrial organization , tariff , investment (military) , nash equilibrium , microeconomics , game theory , revenue sharing , sustainable development , marketing , economics , politics , international trade , political science , law
This study considers a manufacturer with ambidextrous sustainable innovation capability selling products in environmentally conscious market through an independent retailer in a two‐period game setting. We design a two‐period game theoretic and dyadic supply chain (SC) model considering exploitative and exploratory nature of environmental innovations. We study five different contract types, namely, wholesale price contract, vertical Nash game structure, cost sharing contract, revenue sharing contract and two‐part tariff contract. We demonstrate the impact of market sensitivity towards sustainable innovation and cost parameters on optimal level of decision parameters. The equilibrium results reveal that a suitably designed two‐part tariff contract can be used to achieve coordination in a fragmented SC. The equilibrium results assist managers to optimise the SC based on the two‐period contract model. The results obtained in this study can help the decision‐makers to take decisions on investment in the ambidextrous sustainable innovation under different types of contract structures.