Competition or Authorization—Manufacturers’ Choice of Remanufacturing Strategies

Wu, Ying; Li, Youwei

Abstract

In the face of the cannibalization of remanufactured products produced by independent remanufacturers (IRs), original equipment manufacturers (OEMs) can produce remanufactured products themselves to compete with independent remanufacturers (IRs), or they can authorize the IRs to cooperate because of their seller reputation. This paper studies the key factors that influence OEMs’ choice of remanufacturing strategies. By establishing three two-stage models and comparing them, the thresholds for OEMs to choose different remanufacturing strategies were obtained. There is also an interesting finding that when the authorization fee is higher than a certain value, even if the remanufactured product poses a competitive threat to the new product, the OEM will help the IR improve their remanufacturing technology to save costs and achieve a win–win situation. With the increase in authorization fees, OEMs’ profits will increase first and then decrease, so it is not always better for OEMs to charge higher authorization fees. Whether it is an authorization or a competitive scenario, the improvement in remanufacturing technology by OEMs can increase the output of remanufactured products, which is conducive to environmental protection.

Citation

Wu, Y., & Li, Y. (2022). Competition or Authorization—Manufacturers’ Choice of Remanufacturing Strategies. Sustainability, 14(19), Article 12632. https://doi.org/10.3390/su141912632

• Journal Article Type: Article
• Acceptance Date: Sep 30, 2022
• Online Publication Date: Oct 4, 2022
• Publication Date: Oct 1, 2022
• Deposit Date: Dec 30, 2022
• Publicly Available Date: Jan 3, 2023
• Journal: Sustainability (Switzerland)
• Electronic ISSN: 2071-1050
• Publisher: MDPI
• Peer Reviewed: Peer Reviewed
• Volume: 14
• Issue: 19
• Article Number: 12632
• DOI: https://doi.org/10.3390/su141912632
• Keywords: Remanufacturing strategies; Competition; Authorization; Strategic choice; Authorization fee
• Public URL: https://hull-repository.worktribe.com/output/4163205
• Publisher URL: https://www.mdpi.com/2071-1050/14/19/12632