Cooperative quality investment in contract manufacturing: balancing incentives and encroachment threat
研究了原始品牌制造商如何通过合作质量投资激励合同制造商提升产品质量，同时应对其可能以自有品牌入侵零售市场的威胁，发现合作投资总能促进质量提升，且入侵成本较大时对原始品牌更有利。
In addition to providing contract manufacturing services for original brand manufacturer (OBM)'s national brand (NB) product, contract manufacturer (CM) has the motivation to build private brand (PB) with higher- or lower-quality to encroach the retail market. Faced with CM encroachment, a crucial question OBM needs to address is how to incentivize contract manufacturing quality effort and improve the quality of NB. This work constructs a cooperative quality investment (CQI) model considering CM encroachment. Interesting findings include: (i) CQI strategy will always promote the CM to achieve quality improvement. Moreover, when the encroachment cost is relatively large, the OBM can achieve higher profit by adopting CQI. (ii) Both higher- and lower-quality encroachment improve NB quality without CQI. Under CQI, the impact of encroachment on NB quality depends on the type and cost of encroachment, and the quality decision rights. (iii) If the CM has NB quality decision right, the CM always has motivation to encroach with lower-quality PB which may achieve a win-win situation for the two parties. Otherwise, (iv) whether CM encroaches depends on the encroachment cost and CQI strategy. The impact of encroachment on the OBM is determined by both the encroachment cost and the type of encroachment.