As the main body of entrepreneurial activities, startups face larger demand uncertainty and market competition, and thus need to undertake greater bankruptcy risk. They concern more about survival rather than growth during the operations. Volume flexible technology choice is one of the most important operational decisions of startups, which can help them to reduce the mismatch between supply and demand, and enhance their competitiveness. It also has a higher capacity cost, which leads to a higher investment cost and bankruptcy risk. So, the startups need to weigh the advantages against the disadvantages of volume flexibility. In this paper, the volume flexible technology decision of the startup is analyzed under competitive setting. Using the game theory the model in which a startup company and an established firm engage in output competition in the market is first built. Both of them can choose volume flexible technology or traditional technology. The startup company maximize its survival probability while the established firm maximizes its profit. Then it obtains the optimal capacity investment decisions of the 2 firms, the optimal survival probability of the startup, and the optimal profit of the established firm under different competitive strategies. Nash equilibrium is used to obtain the equilibrium technology choice of the 2 firms. Finally, it conducts a numerical experimentation to analyze the factors that influence the equilibrium strategies of the two firms. The result shows that under competitive setting, the startup company pays more attention to the cost factor, is more likely to choose non-flexible technology, which has a lower cost than the volume flexible technology. However, the established firm is more sensitive to the demand variance, will choose volume flexible technology when the demand variance is high. As the frictional cost of the volume flexible technology increase, both of them prefer non-flexible technology.
CAO Guo-zhao, QI Er-shi
. Strategic Volume Flexible Technology Decision of Startups under Competitive Setting[J]. Chinese Journal of Management Science, 2016
, 24(11)
: 94
-102
.
DOI: 10.16381/j.cnki.issn1003-207x.2016.11.011
[1] Wei M M, Yao Tao, Jiang Bin, et al. Profit seeking vs. survival seeking: An analytical study of supplier's behavior and buyer's subsidy strategy[J]. Production and Operations Management,2013, 22(2):269-282.
[2] Joglekar N, Levesque M. The role of operations management across the entrepreneurial value chain[J]. Production and Operations Management, 2013, 22(6): 1321-1335.
[3] Krishnan V, Operations management opportunities in technology commercialization and entrepreneurship[J]. Production and Operations Management, 2013, 22 (6): 1439-1445.
[4] 曹国昭,齐二石.竞争博弈下新创企业混合柔性技术战略决策研究[J].管理学报,2015, 12 (1) : 118-125.
[5] 倪得兵,李韬韬,唐小我. 需求不确定下生产能力与竞争优势的关系[J]. 中国管理科学, 2012,20(6):133-140.
[6] Gerwin D. Manufacturing flexibility: A strategic perspective[J]. Management Science, 1993,39(4):395-410.
[7] Mishra R, Pundir A K, Ganapathy L. Manufacturing flexibility research: A review of literature and agenda for future research[J]. Global Journal of Flexible Systems Management, 2014, 15 (2): 101-112.
[8] Kesavan S, Staats B R, Gilland W. Volume flexibility in services: The costs and benefits of flexible labor resources[J]. Management Science, 2014, 60(8): 1884-1906.
[9] Goyal M, Netessine S. Volume flexibility, product flexibility, or both: The role of demand correlation and product substitution[J]. Manufacturing & Service Operations Management, 2011, 13(2):180-193.
[10] Egelman C D, Epple D, Argote L, et al. Learning by doing in multiproduct manufacturing: Variety, customizations, and overlapping product generations[J]. Management Science, 2016, articles in advance.
[11] 黄卫来,张子刚,马辉民,等.基于产量柔性的经济生产批量模型研究[J].管理工程学报,1998,12(3):53-58.
[12] Patel P C, Jayaram J. The antecedents and consequences of product variety in new ventures: An empirical study[J]. Journal of Operations Management, 2014, 32(1-2):34-50.
[13] Archibald T W, Thomas L C, Betts J M, et al. Should start-up companies be cautious? Inventory policies which maximize survival probabilities[J]. Management Science, 2002, 48(9):1161-1174.
[14] Swinney R, Cachon G P,Netessine S. Capacity investment timing by start-ups and established firms in new markets[J]. Management Science, 2011, 57(4): 763-777.
[15] Tanrisever F, Erzurumlu S S, Joglekar N. Production, process investment and the survival of debt financed startup firms[J]. Production and Operations Management, 2012, 21(4):637-652.
[16] 梁强,李新春,周莉.新创企业内部资源与外部关系的战略平衡—中国情境下的经验研究[J].管理科学学报,2016,19(4):71-87.
[17] 李逸,买忆媛.新创企业的品牌资产提升:广告投入还是研发投入[J].管理工程学报,2016,30(3):81-89.
[18] Swinney R, Netessine S. Long-term contracts under the threat of supplier default[J]. Manufacturing & Service Operations Management, 2009.11(1):109-127.
[19] 熊恒庆,黄勇,万洁.供应链订货时机协调:一个风险厌恶的视角[J].中国管理科学,2016,24(8):88-97.
[20] 代建生,秦开大.具有风险规避销售商的最优供应链回购契约[J].2016,24(7):72-81.
[21] Goyal M, Netessine S. Strategic technology choice and capacity investment under demand uncertainty[J]. Management Science, 2007, 53(2):192-207.
