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

Xue, D., Teunter, R., Zhu, S. & Zhou, W., 4-Dec-2019, In : Omega. 99, 102168.

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

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DOI

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
JournalOmega
Volume99
Early online date4-Dec-2019
Publication statusE-pub ahead of print - 4-Dec-2019

ID: 109560960