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Entering the high-end market by collecting and remanufacturing a competitor’s high-end cores

Author

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  • Xue, Dongmei
  • Teunter, Ruud H.
  • Zhu, Stuart X.
  • Zhou, Weihua

Abstract

Motivated by the smartphone industry, this paper studies a duopoly channel consisting of a high-end firm and a low-end firm. The high-end firm sells its own brand at a high profit margin. The low-end firm sells its own brand at a low profit margin, but can choose to differentiate by collecting and remanufacturing high-end cores, thereby entering the more lucrative high-end market. We investigate how the equilibrium strategies of both firms are influenced by the cost structure and customers’ valuation. We derive a condition for the low-end firm to engage in remanufacturing high-end cores, and show how the high-end firm reacts to limit the loss of market share.

Suggested Citation

  • Xue, Dongmei & Teunter, Ruud H. & Zhu, Stuart X. & Zhou, Weihua, 2021. "Entering the high-end market by collecting and remanufacturing a competitor’s high-end cores," Omega, Elsevier, vol. 99(C).
    • Handle: RePEc:eee:jomega:v:99:y:2021:i:c:s0305048318310806
    DOI: 10.1016/j.omega.2019.102168
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    Cited by:

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    3. Du, Hang & Wei, Lai & Zhu, Qinghua, 2023. "Competition of consumables’ original brand manufacturers and remanufacturers considering the entry of compatible manufacturers," European Journal of Operational Research, Elsevier, vol. 306(2), pages 679-692.
    4. Liu, Chang-Yi & Wang, Hui & Tang, Juan & Chang, Ching-Ter & Liu, Zhi, 2021. "Optimal recovery model in a used batteries closed-loop supply chain considering uncertain residual capacity," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 156(C).
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    6. Hosseini-Motlagh, Seyyed-Mahdi & Choi, Tsan-Ming & Johari, Maryam & Nouri-Harzvili, Mina, 2022. "A profit surplus distribution mechanism for supply chain coordination: An evolutionary game-theoretic analysis," European Journal of Operational Research, Elsevier, vol. 301(2), pages 561-575.
    7. Chunmei Li & Tianjian Yang & Zijing Bian, 2023. "Does Environmental Education Always Contribute to Remanufacturing Supply Chain Development?," IJERPH, MDPI, vol. 20(6), pages 1-18, March.

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