Data-driven analysis of digital entrepreneurship in medical supply resilience confronting the COVID-19 epidemic

Soaring demand for medical supply caused by the frequent outbreaks of regional COVID-19 epidemic has gained increasing attention in recent years. This motivates the upstream manufacturers to develop their self-brand products to satisfy the exploded demand, which in turn leads to tense competition with their brand customers in the downstream market. In this paper, we use a multi-methodological approach to study whether the incumbent brand should adopt digital technology to forecast demand information and then flexibly adjust the order decisions. From both data statistics and analytical investigation, we find digital transformation can achieve a triple-win situation among the incumbent brand, the social welfare and the consumer surplus. Win-win situation also exists between the manufacturer and the incumbent brand. Our extensive Monte-Carlo data simulation indicates that: (1) a low product substitutability can promote the incumbent brand's digital transformation by at least 50.8% and at most 97.3% efficiency improvements; (2) a moderate product substitutability can improve the incumbent brand's digital transformation incentive by at least 43.7% and at most 98.8%; and (3) a high product substitutability benefits the manufacturer through digital transformation by at least 31.4% but at most 70.8%. Our research contributes by both theoretical optimization and data processing/policy simulation, which generates useful managerial insights for firms' digital entrepreneurship decisions.

Automated summary

This paper examines whether the incumbent brand should adopt digital technology to forecast demand and adjust order decisions in the face of soaring demand for medical supply caused by frequent outbreaks of regional COVID-19 epidemic. The study finds that digital transformation can lead to a triple-win situation among the incumbent brand, social welfare, and consumer surplus, as well as bring benefits to the manufacturer. Furthermore, the research provides insights for firms' digital entrepreneurship decisions through theoretical optimization and data processing/policy simulation.