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

Dongmei Xue, Ruud Teunter, Stuart Zhu, W. Zhou*

*Corresponding author for this work

Research output: Contribution to journalArticleAcademicpeer-review

4 Citations (Scopus)
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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.
Original languageEnglish
Article number102168
Number of pages12
JournalOmega
Volume99
Early online date4-Dec-2019
DOIs
Publication statusPublished - Mar-2021

Keywords

  • Remanufacturing
  • Competition
  • Duopoly
  • TAKE-BACK
  • PRICE-COMPETITION
  • PRODUCT
  • QUALITY
  • IMPACT
  • SEGMENTATION
  • STRATEGY

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