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

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

Omega, 2021, vol. 99, issue C

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.

Keywords: Remanufacturing; Competition; Duopoly (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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DOI: 10.1016/j.omega.2019.102168

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