Strategic Remanufacturing under Competition

Q4 Business, Management and Accounting

Review of Marketing Science Pub Date : 2017-03-01 DOI:10.1515/roms-2019-0019

Zhongwen Ma, A. Prasad, S. Sethi

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引用次数: 2

Abstract

Abstract We investigate firms’ remanufacturing strategies for the case of a duopoly. On the one hand, remanufactured products cannibalize sales of new products of the same firm thereby hurting its profits. On the other hand, they can be part of a profitable marketing strategy that targets different customer preferences by providing a larger number of alternatives to customers. This paper studies the tradeoff between these effects and how it is influenced by competition. We develop a model where demand functions for new and remanufactured products of each firm are derived from utility maximization by a representative consumer. This allows us to capture preference and substitution effects between all offered products in the market. We discuss how equilibrium strategies are affected by factors such as competition, substitutability, production cost as well as remanufacturing cost. For example, when competitive intensity between new and new products, and remanufactured and remanufactured products, is (high), both (neither) firms offer remanufactured products in a symmetric equilibrium. If substitution between new and remanufactured products of the same firm is low, but the remanufactured product has a lower margin than the new product, firms can be worse off from remanufacturing.

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竞争环境下的战略再制造

摘要在双寡头垄断的情况下，我们研究了企业的再制造策略。一方面，再制造产品蚕食了同一公司新产品的销售，从而损害了其利润。另一方面，它们可以成为盈利营销战略的一部分，通过向客户提供更多的替代品来针对不同的客户偏好。本文研究了这些影响之间的权衡，以及它如何受到竞争的影响。我们开发了一个模型，其中每个公司的新产品和再制造产品的需求函数来自代表性消费者的效用最大化。这使我们能够捕捉市场上所有产品之间的偏好和替代效应。我们讨论了竞争、可替代性、生产成本以及再制造成本等因素对均衡策略的影响。例如，当新产品和新产品、再制造产品和再制造产品之间的竞争强度（高）时，两家（都不是）公司都在对称均衡中提供再制造产品。如果同一企业的新产品和再制造产品之间的替代率较低，但再制造产品的利润率低于新产品，那么企业的再制造情况可能会更糟。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

Review of Marketing Science Business, Management and Accounting-Marketing

CiteScore

1.10

自引率

0.00%

发文量

期刊介绍： The Review of Marketing Science (ROMS) is a peer-reviewed electronic-only journal whose mission is twofold: wide and rapid dissemination of the latest research in marketing, and one-stop review of important marketing research across the field, past and present. Unlike most marketing journals, ROMS is able to publish peer-reviewed articles immediately thanks to its electronic format. Electronic publication is designed to ensure speedy publication. It works in a very novel and simple way. An issue of ROMS opens and then closes after a year. All papers accepted during the year are part of the issue, and appear as soon as they are accepted. Combined with the rapid peer review process, this makes for quick dissemination.