Supply chain structure in a duopoly market in a technology intensive industry

Abstract

This paper analyses the dynamics of supply chain in the technology intensive industry and how the supply chain structure is likely to evolve. A working hypothesis is made about the supply chain structure in a technologically intensive duopoly market. The game is modeled using a duopoly market and the evolution of the market structure is analyzed based on the game formulation. To model the market structure, 4 players are considered wherein 2 of the players are the firms competing in the end market resulting in the duopoly. 2 other players are the suppliers supplying to the two firms. The game is analyzed in two stages, the firms compete in the market and the suppliers competing to supply to the firms. The bargaining power of the firms with the suppliers is studied.The results from the analyses are seen in light of actual phenomenon observed using some examples. The characteristics of each of the examples are identified. The reasons for falling in line with the derived results in case the examples validate the results and reasons for deviations in cases where the illustration from the example differs from the results derived are identified.