Patent licensing strategies in supply chains with downstream coopetition

Abstract

This study investigates a supply chain comprising a technology patent holder, a national brand, and an outsourcing manufacturer. Through the development of an analytical model, we explore the effects of downstream co-opetition on the patent holder’s licensing strategies and clarify the interactive dynamics between the involved parties. The key findings are as follows: (1) Enhancing consumer’s perceived value of products produced by the outsourcing manufacturer does not always lead to positive outcomes. (2) Expanding patent licensing to additional firms may not always be advantageous for the patent holder and, in certain cases, may even reduce its profitability. (3) Under specific conditions, there is an interaction between the patent holder’s licensing strategy and the national brand’s outsourcing decisions. Notably, when the national brand assumes a leadership role in decision-making, this interaction becomes more pronounced. (4) The existence of a feasible decision-making region enables not only a “win–win” outcome for decision makers but also a “win–win–win” scenario benefiting all participants.