Green Co-Creation Strategies among Supply Chain Partners: A Value Co-Creation Perspective

Abstract

In response to the global fight against environmental deterioration and resource shortage, many governments call on firms to implement green innovation strategies. However, for most small and medium-sized firms, the high cost of green innovation makes it difficult to achieve green goals, causing the need for a growing number of firms to cooperate with their supply chain partners on green innovations. Thus, this study explores, from a value co-creation perspective, how supply chain partners share the investment in, and benefits of, green innovation, assuring their long-term cooperation. Based on a three-level manufacturing supply chain, this paper proposes three different types of green co-creation strategies (i.e., the manufacturer and its supplier, the manufacturer and its competitor, the manufacturer and its retailer). We set the mechanism of co-creation to share the cost of green investment and consider the impact of co-creation on the sales of supply chain partners. Then, by constructing the value functions of three co-creation strategies and proving the concavity of these functions, the findings indicate that different co-creation strategies can indeed improve the firm’s profit in a certain range and achieve a different maximum value in a certain green investment sharing point. This study enriches the literature on green co-creation in supply chains by combing green investment sharing strategies among supply chain partners with value co-creation. In addition, this study provides manufacturers with guidelines on how to share green costs and choose a green co-creation strategy in different operational environments.