Choosing Recovery Strategies for Waste Electronics: How Product Modularity Influences Cooperation and Competition

Xuxin Lai, Nengmin Wang (), Bin Jiang and Tao Jia
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Xuxin Lai: School of Management, Xi’an Jiaotong University, Xi’an 710049, China
Nengmin Wang: School of Management, Xi’an Jiaotong University, Xi’an 710049, China
Bin Jiang: Driehaus College of Business, DePaul University, Chicago, IL 60604, USA
Tao Jia: School of Management, Xi’an Jiaotong University, Xi’an 710049, China

Sustainability, 2024, vol. 16, issue 20, 1-31

Abstract: Modular design facilitates easy disassembly and reduces the manufacturer’s remanufacturing costs. However, the simplicity and modular structure of products can intensify competition between manufacturers and third-party recyclers. To improve recovery efficiency, this study examines the impact of modular design on the manufacturer’s selection of recovery strategies, including centralized, cooperation, and competition strategies. We examine the optimal recovery strategy for achieving both economic goals, such as supply chain profit, and environmental goals, such as collection quantity. Our results indicate that the manufacturer should adopt cooperation recovery and invest in higher modularity when faced with strong competition from third-party recyclers. Conversely, when the competitiveness of third-party recovery is relatively low, a competition recovery strategy is more advantageous. Contrary to conventional wisdom, which suggests limiting product disassembly to reduce third-party recovery competitiveness, our results indicate that manufacturers should invest in higher modularity and avoid engaging in price wars to prevent third-party entry. Moreover, competition recovery leads to a higher collection quantity, while cooperation recovery is preferred in terms of supply chain profit. This study provides theoretical guidance for manufacturers in selecting optimal recovery strategies and offers recommendations for governments on regulating product disassembly effectively.

Keywords: product modularity; closed-loop supply chain; consumer behavior; recovery options; collecting competition (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2024
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