IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v14y2022i11p6866-d831652.html
   My bibliography  Save this article

Analysis of Competitiveness in Agri-Supply Chain Logistics Outsourcing: A B2B Contractual Framework

Author

Listed:
  • Arkajyoti De

    (Department of Management Studies, Indian Institute of Technology Delhi, New Delhi 110016, India)

  • Surya Prakash Singh

    (Department of Management Studies, Indian Institute of Technology Delhi, New Delhi 110016, India)

Abstract

COVID-19 has left some permanent effects on the Regional Agri-Supply Chain (RASC). It has single-handedly accelerated the RASC’s performance through the globalization of local products and increased e-agri-business, virtual retailing trends, and smart logistics and warehousing services. The post-COVID worldwide growing demand for regional agri-products has increased the competitiveness in logistics outsourcing. Motivated by these changing notions, this paper addresses two major questions—whether the competitiveness in logistics outsourcing allows the supply chain drivers (supplier, retailer, and 3PL) to form a sustainable B2B pricing supply chain model, and what will be 3PL firms’ strategic decisions to secure sustainable profit under this competitiveness? In the light of competitive literature, this paper proposes two decision-making approaches, optimistic and pessimistic, models them using the Stackelberg game theory, and solves them using the subgame perfect Nash equilibrium. The result shows that, even after competitiveness in logistics outsourcing, the supply chain drivers agree to form a contractual supply chain. However, the competitive strategy-making of 3PL firms is a little tricky. Each focal 3PL firm must have perfect information about the peer firm’s strategic movement to choose its preferable strategy. Further, they can preferably constrain their core competencies (service price and quality level) to assure a sustainable profit.

Suggested Citation

  • Arkajyoti De & Surya Prakash Singh, 2022. "Analysis of Competitiveness in Agri-Supply Chain Logistics Outsourcing: A B2B Contractual Framework," Sustainability, MDPI, vol. 14(11), pages 1-33, June.
    • Handle: RePEc:gam:jsusta:v:14:y:2022:i:11:p:6866-:d:831652
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/14/11/6866/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/14/11/6866/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Hsiao, H.I. & Kemp, R.G.M. & van der Vorst, J.G.A.J. & (Onno) Omta, S.W.F., 2010. "A classification of logistic outsourcing levels and their impact on service performance: Evidence from the food processing industry," International Journal of Production Economics, Elsevier, vol. 124(1), pages 75-86, March.
    2. Zhang, Jian & Nault, Barrie R. & Tu, Yiliu, 2015. "A dynamic pricing strategy for a 3PL provider with heterogeneous customers," International Journal of Production Economics, Elsevier, vol. 169(C), pages 31-43.
    3. Chen, Hsiao-Chi & Liu, Shi-Miin, 2016. "Should ports expand their facilities under congestion and uncertainty?," Transportation Research Part B: Methodological, Elsevier, vol. 85(C), pages 109-131.
    4. Uwe Deichmann & Aparajita Goyal & Deepak Mishra, 2016. "Will digital technologies transform agriculture in developing countries?," Agricultural Economics, International Association of Agricultural Economists, vol. 47(S1), pages 21-33, November.
    5. Wang, Min & Zhao, Lindu & Herty, Michael, 2019. "Joint replenishment and carbon trading in fresh food supply chains," European Journal of Operational Research, Elsevier, vol. 277(2), pages 561-573.
    6. Kuang, Zhonghong & Lian, Zeng & Lien, Jaimie W. & Zheng, Jie, 2020. "Serial and parallel duopoly competition in multi-segment transportation routes," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 133(C).
    7. Jasper Veldman & Warse Klingenberg & Gerard J. C. Gaalman & Ruud H. Teunter, 2014. "Getting What You Pay For—Strategic Process Improvement Compensation and Profitability Impact," Production and Operations Management, Production and Operations Management Society, vol. 23(8), pages 1387-1400, August.
    8. LIU, Changyu & LI, Jiale & LIU, Jing, 2015. "Rural E-commerce and New Rural Business Model: A Case Study of "Taobao Village" in Jiangsu Province," Asian Agricultural Research, USA-China Science and Culture Media Corporation, vol. 7(11), pages 1-4, November.
    9. Marusak, Amy & Sadeghiamirshahidi, Narjes & Krejci, Caroline C. & Mittal, Anuj & Beckwith, Sue & Cantu, Jaime & Morris, Mike & Grimm, Jason, 2021. "Resilient regional food supply chains and rethinking the way forward: Key takeaways from the COVID-19 pandemic," Agricultural Systems, Elsevier, vol. 190(C).
    10. Wu, Qing & Mu, Yinping & Feng, Yi, 2015. "Coordinating contracts for fresh product outsourcing logistics channels with power structures," International Journal of Production Economics, Elsevier, vol. 160(C), pages 94-105.
    11. Kramer, Anja & Krebs, Vanessa & Schmidt, Martin, 2021. "Strictly and Γ-robust counterparts of electricity market models: Perfect competition and Nash–Cournot equilibria," Operations Research Perspectives, Elsevier, vol. 8(C).
    12. Nematollahi, Mohammadreza & Tajbakhsh, Alireza & Mosadegh Sedghy, Bahareh, 2021. "The reflection of competition and coordination on organic agribusiness supply chains," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 154(C).
    13. Yu, Yunlong & Xiao, Tiaojun, 2021. "Analysis of cold-chain service outsourcing modes in a fresh agri-product supply chain," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 148(C).
    14. Vickers, John, 2021. "Competition for imperfect consumers," International Journal of Industrial Organization, Elsevier, vol. 79(C).
    15. Ishii, Masahiro & Lee, Paul Tae-Woo & Tezuka, Koichiro & Chang, Young-Tae, 2013. "A game theoretical analysis of port competition," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 49(1), pages 92-106.
    16. Choi, Tsan-Ming, 2007. "Pre-season stocking and pricing decisions for fashion retailers with multiple information updating," International Journal of Production Economics, Elsevier, vol. 106(1), pages 146-170, March.
    17. Sammi Y. Tang & Haresh Gurnani & Diwakar Gupta, 2014. "Managing Disruptions in Decentralized Supply Chains with Endogenous Supply Process Reliability," Production and Operations Management, Production and Operations Management Society, vol. 23(7), pages 1198-1211, July.
    18. Albert Y. Ha & Lode Li & Shu-Ming Ng, 2003. "Price and Delivery Logistics Competition in a Supply Chain," Management Science, INFORMS, vol. 49(9), pages 1139-1153, September.
    19. Jenny C. Aker & Ishita Ghosh & Jenna Burrell, 2016. "The promise (and pitfalls) of ICT for agriculture initiatives," Agricultural Economics, International Association of Agricultural Economists, vol. 47(S1), pages 35-48, November.
    20. Giaime Berti & Catherine Mulligan, 2016. "Competitiveness of Small Farms and Innovative Food Supply Chains: The Role of Food Hubs in Creating Sustainable Regional and Local Food Systems," Sustainability, MDPI, vol. 8(7), pages 1-31, July.
    21. Zhao, Jing & Wei, Jie & Li, Yongjian, 2014. "Pricing decisions for substitutable products in a two-echelon supply chain with firms׳ different channel powers," International Journal of Production Economics, Elsevier, vol. 153(C), pages 243-252.
    22. Tessmann, Jannes, 2021. "Strategic responses to food safety standards – The case of the Indian cashew industry," World Development Perspectives, Elsevier, vol. 23(C).
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Guo, Di & Jiang, Kun & Xu, Chenggang & Yang, Xiyi, 2022. "Industrial clustering, income and inequality in rural China," World Development, Elsevier, vol. 154(C).
    2. Nafiseh Fallahi & Ashkan Hafezalkotob & Sadigh Raissi & Vahidreza Ghezavati, 2023. "Cooperation and coopetition among retailers-third party logistics providers alliances under different risk behaviors, uncertainty demand and environmental considerations," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 25(6), pages 5597-5633, June.
    3. Fang, Lan & Quan, Yurong & Mao, Hui & Chen, Shaojian, 2022. "The Information Communication Technology and Off-farm Employment of Rural Laborers: An Analysis Based on the Micro Data of China Family Panel Studies," 2022 Annual Meeting, July 31-August 2, Anaheim, California 322088, Agricultural and Applied Economics Association.
    4. Xiaoxu Chen & Peng Xu & Thomas Walker & Shengzhong Huang, 2019. "Pricing and Ordering Decisions in a Retailer Dominant Channel Involving a Third-Party Logistics Provider," Complexity, Hindawi, vol. 2019, pages 1-15, July.
    5. Xian Liang & Hui Xiao & Fangmiao Hou & Xuan Guo & Lishan Li & Longjunjiang Huang, 2024. "Breaking the chains of poverty: examining the influence of smartphone usage on multidimensional poverty in rural settings," Palgrave Communications, Palgrave Macmillan, vol. 11(1), pages 1-17, December.
    6. Wen Yao & Zhuo Sun, 2023. "The Impact of the Digital Economy on High-Quality Development of Agriculture: A China Case Study," Sustainability, MDPI, vol. 15(7), pages 1-19, March.
    7. Edward B. Barbier, 2023. "Overcoming digital poverty traps in rural Asia," Review of Development Economics, Wiley Blackwell, vol. 27(3), pages 1403-1420, August.
    8. Lu, Qihui & Liao, Changhua & Chen, Meilan & Shi, Victor & Hu, Xiangling & Hu, Weiwei, 2024. "Platform financing or bank financing in agricultural supply chains: The impact of platform digital empowerment," European Journal of Operational Research, Elsevier, vol. 315(3), pages 952-964.
    9. Giuseppe Colella & Maria Teresa Paola Caputi Jambrenghi, 2020. "Sustainable Supply Chain in the Agri-Food Sector in South-Italy as an Eco-Sustainability Tool for Innovation and Territorial Development," Journal of Management and Sustainability, Canadian Center of Science and Education, vol. 10(2), pages 1-83, December.
    10. Asadabadi, Ali & Miller-Hooks, Elise, 2018. "Co-opetition in enhancing global port network resiliency: A multi-leader, common-follower game theoretic approach," Transportation Research Part B: Methodological, Elsevier, vol. 108(C), pages 281-298.
    11. Daum, Thomas & Villalba, Roberto & Anidi, Oluwakayode & Mayienga, Sharon Masakhwe & Gupta, Saurabh & Birner, Regina, 2021. "Uber for tractors? Opportunities and challenges of digital tools for tractor hire in India and Nigeria," World Development, Elsevier, vol. 144(C).
    12. Min, Shi & Liu, Min & Huang, Jikun, 2020. "Does the application of ICTs facilitate rural economic transformation in China? Empirical evidence from the use of smartphones among farmers," Journal of Asian Economics, Elsevier, vol. 70(C).
    13. Chen, Hsiao-Chi & Liu, Shi-Miin, 2024. "Optimal investments of port authorities facing ambiguity on uncertain market demands," Transportation Research Part B: Methodological, Elsevier, vol. 179(C).
    14. Wan, Yulai & Basso, Leonardo J. & Zhang, Anming, 2016. "Strategic investments in accessibility under port competition and inter-regional coordination," Transportation Research Part B: Methodological, Elsevier, vol. 93(PA), pages 102-125.
    15. Song, Zhuzhu & Tang, Wansheng & Zhao, Ruiqing, 2018. "Cooperation mode for a liner company with heterogeneous ports: Business cooperation vs. port investment," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 118(C), pages 513-533.
    16. Nawab Khan & Ram L. Ray & Hazem S. Kassem & Farhat Ullah Khan & Muhammad Ihtisham & Shemei Zhang, 2022. "Does the Adoption of Mobile Internet Technology Promote Wheat Productivity? Evidence from Rural Farmers," Sustainability, MDPI, vol. 14(13), pages 1-15, June.
    17. (Kevin) Park, Hyosoo & Chang, Young-Tae & Zou, Bo, 2018. "Emission control under private port operator duopoly," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 114(C), pages 40-65.
    18. Qianqian Chen & Chao Zhang & Ruifa Hu & Shengyang Sun, 2022. "Can Information from the Internet Improve Grain Technical Efficiency? New Evidence from Rice Production in China," Agriculture, MDPI, vol. 12(12), pages 1-16, December.
    19. Balliauw, Matteo & Kort, Peter M. & Zhang, Anming, 2019. "Capacity investment decisions of two competing ports under uncertainty: A strategic real options approach," Transportation Research Part B: Methodological, Elsevier, vol. 122(C), pages 249-264.
    20. Wang, Junjin & Liu, Jiaguo & Wang, Fan & Yue, Xiaohang, 2021. "Blockchain technology for port logistics capability: Exclusive or sharing," Transportation Research Part B: Methodological, Elsevier, vol. 149(C), pages 347-392.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:14:y:2022:i:11:p:6866-:d:831652. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.