Impact of Leadership Relations and Mature Technology on Digital Technology Complementary Innovation

With the increasing integration of digital technology in supply chains, manufacturers and suppliers are initiating complementary innovations in digital technology. Such digital technology complementary innovations (DTCIs) amplify synergistic effects, fostering cross-domain innovation. This raises significant inquiries about how firms undertake DTCI. In this study, we model a supply chain consisting of a buyer, a new supplier, and an existing supplier, exploring the impacts of the presence of mature technology and varying leadership relations on supply chain collaboration patterns. Our findings highlight several key insights: firstly, for the new supplier, their highest level of effort in DTCI is observed when they play a follower role, and yet attaining a leadership position results in heightened profits. Intriguingly, for the buyer, their position as a leader or follower does not impact their DTCI effort level, and they exhibit a preference for a leadership stance. Secondly, when the existing supplier possesses lower bargaining power, the buyer is inclined towards collaborating with them, anticipating higher profits. Under these circumstances, the new supplier's DTCI effort level is diminished. Thirdly, the probability of DTCI success and the magnitude of digital technology complementarity between parties positively influence the DTCI effort levels of both the buyer and the new supplier but negatively impact the existing supplier.