IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v13y2021i3p1503-d490850.html
   My bibliography  Save this article

Manufacturer’s Sharing Servitization Transformation and Product Pricing Strategy

Author

Listed:
  • Zhenfeng Liu

    (School of Economics and Management, Shanghai Maritime University, Shanghai 201306, China)

  • Ya Xiao

    (School of Economics and Management, Shanghai Maritime University, Shanghai 201306, China)

  • Jian Feng

    (China Institute of FTZ Supply Chain, Shanghai Maritime University, Shanghai 201306, China)

Abstract

The sharing market includes the idle product sharing by the owner and the firm’s new product sharing. Companies participating in the sharing economy choose to withdraw from the market because it is always difficult to make a profit, due to heavy asset investment, but there is no such worry for owners who do not need cost input. At the same time, we have observed that the sharing products launched by companies are difficult to meet the rental needs of consumers. Based on the above findings, we have constructed a model where there is a market where a monopolistic manufacturer sells and rents out at the same time, and owners who purchased new products can choose to rent out products when they are idle. Because of the uncoordinated supply and demand matching of the sharing market and the excessively high unit cost input, our research found that: (1) the barriers for the manufacturer to enter the sharing market are always high—for example, the manufacturer will choose to enter the sharing market only when consumers have a high rate of availability of sharing products. Only when the cost of products in the sharing market is not low will the manufacturer choose to provide sharing services; (2) the competition between the two products in the sharing market weakens the demand cannibalize in the sales market; (3) the manufacturer enters the sharing market to promote the owner’s income. The owner’s earnings will increase with the rising of sharing products’ availability.

Suggested Citation

  • Zhenfeng Liu & Ya Xiao & Jian Feng, 2021. "Manufacturer’s Sharing Servitization Transformation and Product Pricing Strategy," Sustainability, MDPI, vol. 13(3), pages 1-20, February.
    • Handle: RePEc:gam:jsusta:v:13:y:2021:i:3:p:1503-:d:490850
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/13/3/1503/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/13/3/1503/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Ioannis Bellos & Mark Ferguson & L. Beril Toktay, 2017. "The Car Sharing Economy: Interaction of Business Model Choice and Product Line Design," Manufacturing & Service Operations Management, INFORMS, vol. 19(2), pages 185-201, May.
    2. Belk, Russell, 2014. "You are what you can access: Sharing and collaborative consumption online," Journal of Business Research, Elsevier, vol. 67(8), pages 1595-1600.
    3. Médard de Chardon, Cyrille & Caruso, Geoffrey & Thomas, Isabelle, 2017. "Bicycle sharing system ‘success’ determinants," Transportation Research Part A: Policy and Practice, Elsevier, vol. 100(C), pages 202-214.
    4. Samuel P. Fraiberger & Arun Sundararajan, 2015. "Peer-to-Peer Rental Markets in the Sharing Economy," Working Papers 15-19, NET Institute.
    5. Laurell, Christofer & Sandström, Christian, 2018. "Comparing coverage of disruptive change in social and traditional media: Evidence from the sharing economy," Technological Forecasting and Social Change, Elsevier, vol. 129(C), pages 339-344.
    6. Li, Yongjian & Bai, Xuanming & Xue, Kelei, 2020. "Business modes in the sharing economy: How does the OEM cooperate with third-party sharing platforms?," International Journal of Production Economics, Elsevier, vol. 221(C).
    7. Baojun Jiang & Lin Tian, 2018. "Collaborative Consumption: Strategic and Economic Implications of Product Sharing," Management Science, INFORMS, vol. 64(3), pages 1171-1188, March.
    8. Schmidt, Peter, 2020. "The effect of car sharing on car sales," International Journal of Industrial Organization, Elsevier, vol. 71(C).
    9. Zhenfeng Liu & Jian Feng & Jinfeng Wang, 2019. "Effects of the Sharing Economy on Sequential Innovation Products," Complexity, Hindawi, vol. 2019, pages 1-18, January.
    10. Rafael Laurenti & Jagdeep Singh & Joao Miguel Cotrim & Martina Toni & Rajib Sinha, 2019. "Characterizing the Sharing Economy State of the Research: A Systematic Map," Sustainability, MDPI, vol. 11(20), pages 1-21, October.
    11. Bin Liu & Guohua Yang & Qi Zhang, 2020. "Pricing Decisions and Innovation Strategies Choice in Supply Chain with Competing Manufacturers and Common Supplier," Sustainability, MDPI, vol. 12(21), pages 1-16, October.
    12. Lin Tian & Baojun Jiang, 2018. "Effects of Consumer†to†Consumer Product Sharing on Distribution Channel," Production and Operations Management, Production and Operations Management Society, vol. 27(2), pages 350-367, February.
    13. Zhenfeng Liu & Jian Feng & Bin Liu, 2019. "Pricing and Service Level Decisions under a Sharing Product and Consumers’ Variety-Seeking Behavior," Sustainability, MDPI, vol. 11(24), pages 1-16, December.
    14. Meisam Ranjbari & Gustavo Morales-Alonso & Ruth Carrasco-Gallego, 2018. "Conceptualizing the Sharing Economy through Presenting a Comprehensive Framework," Sustainability, MDPI, vol. 10(7), pages 1-24, July.
    15. Jianbo Zhu & Qianqian Shi & Peng Wu & Zhaohan Sheng & Xiangyu Wang, 2018. "Complexity Analysis of Prefabrication Contractors’ Dynamic Price Competition in Mega Projects with Different Competition Strategies," Complexity, Hindawi, vol. 2018, pages 1-9, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Gaidi Tian & Chunfa Li, 2023. "How Can We Promote Smartphone Leasing via a Buyback Program?," Sustainability, MDPI, vol. 15(14), pages 1-29, July.
    2. Lijie Feng & Jiarui Lu & Jinfeng Wang, 2021. "A Systematic Review of Enterprise Innovation Ecosystems," Sustainability, MDPI, vol. 13(10), pages 1-26, May.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Meijian Yang & Enjun Xia, 2021. "A Systematic Literature Review on Pricing Strategies in the Sharing Economy," Sustainability, MDPI, vol. 13(17), pages 1-28, August.
    2. Bian, Yiwen & Cui, Yitong & Yan, Shuai & Han, Xiaohua, 2021. "Optimal strategy of a customer-to-customer sharing platform: Whether to launch its own sharing service?," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 149(C).
    3. Ye, Fei & Ni, Debing & Li, Kevin W., 2021. "Competition between manufacturers and sharing economy platforms: An owner base and sharing utility perspective," International Journal of Production Economics, Elsevier, vol. 234(C).
    4. Huang, Yeu-Shiang & Fang, Chih-Chiang & Lin, Szu-Yu, 2023. "Pricing and operating strategies for products in the sharing economy," International Journal of Production Economics, Elsevier, vol. 266(C).
    5. Pang, Chen & Li, Gang & Jiang, Li, 2023. "Leveraging strategic consumer behavior in consumer-to-consumer resale: From economic and environmental perspectives," Omega, Elsevier, vol. 120(C).
    6. Hu, Xu & Yang, Zhaojun & Sun, Jun & Zhang, Yali, 2021. "Sharing economy of electric vehicle private charge posts," Transportation Research Part B: Methodological, Elsevier, vol. 152(C), pages 258-275.
    7. Feng, Yixuan & Tan, Yinliang (Ricky) & Duan, Yongrui & Bai, Yu, 2020. "Strategies analysis of luxury fashion rental platform in sharing economy," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 142(C).
    8. Ho, Shirley J. & Chang, Hung-Wei, 2022. "Impacts of sharing business on production, sales, and rental markets," International Journal of Production Economics, Elsevier, vol. 248(C).
    9. Lin Tian & Baojun Jiang & Yifan Xu, 2021. "Manufacturer’s Entry in the Product-Sharing Market," Manufacturing & Service Operations Management, INFORMS, vol. 23(3), pages 553-568, May.
    10. Zhenfeng Liu & Jian Feng & Bin Liu, 2019. "Pricing and Service Level Decisions under a Sharing Product and Consumers’ Variety-Seeking Behavior," Sustainability, MDPI, vol. 11(24), pages 1-16, December.
    11. Zhang, Yu & Huang, Min & Tian, Lin & Jin, Delong & Cai, Gangshu(George), 2021. "Build or join a sharing platform? The choice of manufacturer's sharing mode," International Journal of Production Economics, Elsevier, vol. 231(C).
    12. Zhang, Yu & Huang, Min & Tian, Lin & Cai, Gangshu George & Jin, Delong & Fan, Zhiping, 2023. "Manufacturer’s product line selling strategy and add-on policy in product sharing," European Journal of Operational Research, Elsevier, vol. 308(3), pages 1332-1343.
    13. Zhenfeng Liu & Jian Feng & Jinfeng Wang, 2019. "Effects of the Sharing Economy on Sequential Innovation Products," Complexity, Hindawi, vol. 2019, pages 1-18, January.
    14. Chomachaei, Fahimeh & Gal-Or, Esther & Letizia, Paolo & Roma, Paolo, 2024. "The economic viability of the sharing economy business model and its environmental impact," European Journal of Operational Research, Elsevier, vol. 315(3), pages 1197-1209.
    15. Saif Benjaafar & Ming Hu, 2020. "Operations Management in the Age of the Sharing Economy: What Is Old and What Is New?," Manufacturing & Service Operations Management, INFORMS, vol. 22(1), pages 93-101, January.
    16. Tünde Zita Kovács & Forest David & Adrián Nagy & István Szűcs & András Nábrádi, 2021. "An Analysis of the Demand-Side, Platform-Based Collaborative Economy: Creation of a Clear Classification Taxonomy," Sustainability, MDPI, vol. 13(5), pages 1-20, March.
    17. Carson Duan, 2023. "A State-of-the-Art Review of Sharing Economy Business Models and a Forecast of Future Research Directions for Sustainable Development: A Bibliometric Analysis Approach," Sustainability, MDPI, vol. 15(5), pages 1-37, March.
    18. Guo, Dongliang & Fan, Zhi-Ping & Sun, Minghe, 2022. "B2C car-sharing services: Sharing mode selection and value-added service investment," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 165(C).
    19. Francesco Pasimeni, 2020. "The Origin of the Sharing Economy Meets the Legacy of Fractional Ownership," SPRU Working Paper Series 2020-19, SPRU - Science Policy Research Unit, University of Sussex Business School.
    20. Xufeng Liu & Hongmin Chen, 2020. "Sharing Economy: Promote Its Potential to Sustainability by Regulation," Sustainability, MDPI, vol. 12(3), pages 1-13, January.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:13:y:2021:i:3:p:1503-:d:490850. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.