A professor in College of Economics and Management, Nanjing University of Aeronautics and Astronautics, China
A professor in College of Economics and Management, Nanjing University of Aeronautics and Astronautics, China
The Strategy Selection Between Competition and Coopetition for Manufacturers with Agri-Food Waste Valorization
Abstract
While agri-food waste shows significant potential for conversion into value-added products, the widespread commercial application of this potential faces the challenge of substantial capital investment. This is particularly burdensome for small and medium-sized enterprises (SMEs), as such large upfront investments can strain their financial resources. Therefore, exploring how cooperation between enterprises can help SMEs achieve value-added waste processing while controlling costs has become an important research topic. This study considers a system consisting of two agri-food manufacturers: one with value-added recycling technology for agri-food waste and another without such technology. The focus is on the scenario where both manufacturers recycle and add value to agri-food waste. We construct and solve game models under three different modes: competition, patent coopetition, and wholesale coopetition. We analyze the manufacturers' choices between competitive and coopetitive strategies and their decisions regarding value-added recycling of agri-food waste. The findings indicate that: 1) The optimal strategy (competition, patent coopetition, or wholesale coopetition) depends on the bargaining power of the agri-food manufacturers, the differences in production costs, and the market value of the value-added products; 2) When both agri-food manufacturers achieve Pareto improvements in their profits through coopetition strategies (patent coopetition or wholesale coopetition), the recycling rate of the manufacturer without value-added recycling technology increases, while that of the manufacturer with such technology decreases. Furthermore, the recycling rates of both manufacturers are positively correlated with the market value of the value-added products; 3) The impact of the substitution rate of agri-food products on manufacturer profits depends on the competitive/coopetitive relationship between the two manufacturers and the differences in production costs.
Keywords: Waste Valorization; Competition; Patent Coopetition; Wholesale Coopetition