Cooperation and competition in an oligopolistic and mature industry: A case study on the cationic reagent industry based on an optimization model
A cationic reagent is an essential raw material in printing paper production. The market environment of the cationic reagent industry is influenced by the printing paper industry. Owing to the COVID-19 pandemic, the global expansion of remote work and home education has decreased the demand for prin...
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| Format: | Article |
| Language: | English |
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Elsevier
2025-06-01
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| Series: | Operations Research Perspectives |
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| Online Access: | http://www.sciencedirect.com/science/article/pii/S2214716025000016 |
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| author | Joohang Kang Byoungil Choi Chaehong Lim Joonyup Eun |
| author_facet | Joohang Kang Byoungil Choi Chaehong Lim Joonyup Eun |
| author_sort | Joohang Kang |
| collection | DOAJ |
| description | A cationic reagent is an essential raw material in printing paper production. The market environment of the cationic reagent industry is influenced by the printing paper industry. Owing to the COVID-19 pandemic, the global expansion of remote work and home education has decreased the demand for printing papers. Consequently, competition among market players (i.e., suppliers and buyers) in the cationic reagent industry is intensifying. This study focuses on cooperation between market players in the cationic reagent industry, representing a typical oligopolistic and mature industry. It proposes a supply chain optimization model that minimizes the costs of the entire supply chain, incorporating buyers’ risk hedge tendency to address market uncertainty. The model is empirically tested using accessible and reliable data to assess its business applicability. Numerical experiments are conducted to explore scenarios that can occur in real market environment, such as levels of risk hedging, trade disputes, decreases in demand, and changes in production capacity. The experimental results provide managerial implications. As buyers maximize the degree to which they diversify their purchase quantities across multiple suppliers to reduce risks, differential costs of the entire supply chain increase by 19%, which are costs that cannot be reduced by suppliers’ capabilities and inevitably arise due to differences between suppliers (e.g., geography, politics, and government policies). However, in unfavorable market conditions, such as trade disputes and decreases in demand, less competitive suppliers can survive. This study shows that when market demand in the cationic reagent industry decreases, two suppliers may potentially experience operational outages. In reality, these two suppliers deteriorated under the challenging market conditions during the COVID-19 pandemic. |
| format | Article |
| id | doaj-art-b611fffb0b2b42e19021a526548d432e |
| institution | Kabale University |
| issn | 2214-7160 |
| language | English |
| publishDate | 2025-06-01 |
| publisher | Elsevier |
| record_format | Article |
| series | Operations Research Perspectives |
| spelling | doaj-art-b611fffb0b2b42e19021a526548d432e2025-01-29T05:01:18ZengElsevierOperations Research Perspectives2214-71602025-06-0114100325Cooperation and competition in an oligopolistic and mature industry: A case study on the cationic reagent industry based on an optimization modelJoohang Kang0Byoungil Choi1Chaehong Lim2Joonyup Eun3Graduate School of Management of Technology, Korea University, Seoul 02841, South KoreaGraduate School of Management of Technology, Korea University, Seoul 02841, South KoreaGraduate School of Management of Technology, Korea University, Seoul 02841, South KoreaCorresponding author.; Graduate School of Management of Technology, Korea University, Seoul 02841, South KoreaA cationic reagent is an essential raw material in printing paper production. The market environment of the cationic reagent industry is influenced by the printing paper industry. Owing to the COVID-19 pandemic, the global expansion of remote work and home education has decreased the demand for printing papers. Consequently, competition among market players (i.e., suppliers and buyers) in the cationic reagent industry is intensifying. This study focuses on cooperation between market players in the cationic reagent industry, representing a typical oligopolistic and mature industry. It proposes a supply chain optimization model that minimizes the costs of the entire supply chain, incorporating buyers’ risk hedge tendency to address market uncertainty. The model is empirically tested using accessible and reliable data to assess its business applicability. Numerical experiments are conducted to explore scenarios that can occur in real market environment, such as levels of risk hedging, trade disputes, decreases in demand, and changes in production capacity. The experimental results provide managerial implications. As buyers maximize the degree to which they diversify their purchase quantities across multiple suppliers to reduce risks, differential costs of the entire supply chain increase by 19%, which are costs that cannot be reduced by suppliers’ capabilities and inevitably arise due to differences between suppliers (e.g., geography, politics, and government policies). However, in unfavorable market conditions, such as trade disputes and decreases in demand, less competitive suppliers can survive. This study shows that when market demand in the cationic reagent industry decreases, two suppliers may potentially experience operational outages. In reality, these two suppliers deteriorated under the challenging market conditions during the COVID-19 pandemic.http://www.sciencedirect.com/science/article/pii/S2214716025000016Supply chain managementSupply chain optimization modelCationic reagentMature industryOligopolistic market |
| spellingShingle | Joohang Kang Byoungil Choi Chaehong Lim Joonyup Eun Cooperation and competition in an oligopolistic and mature industry: A case study on the cationic reagent industry based on an optimization model Operations Research Perspectives Supply chain management Supply chain optimization model Cationic reagent Mature industry Oligopolistic market |
| title | Cooperation and competition in an oligopolistic and mature industry: A case study on the cationic reagent industry based on an optimization model |
| title_full | Cooperation and competition in an oligopolistic and mature industry: A case study on the cationic reagent industry based on an optimization model |
| title_fullStr | Cooperation and competition in an oligopolistic and mature industry: A case study on the cationic reagent industry based on an optimization model |
| title_full_unstemmed | Cooperation and competition in an oligopolistic and mature industry: A case study on the cationic reagent industry based on an optimization model |
| title_short | Cooperation and competition in an oligopolistic and mature industry: A case study on the cationic reagent industry based on an optimization model |
| title_sort | cooperation and competition in an oligopolistic and mature industry a case study on the cationic reagent industry based on an optimization model |
| topic | Supply chain management Supply chain optimization model Cationic reagent Mature industry Oligopolistic market |
| url | http://www.sciencedirect.com/science/article/pii/S2214716025000016 |
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