Production and remanufacturing decisions in a non-competitive remanufacturing environment

This paper considers remanufactured products entering new mar-kets without competing with prototype new products, which we call non-competitive remanufacturing(NCR). Changes in the functionality of reman-ufactured products urge the manufacturer to adopt a market diversification strategy, which leads the manufacturer to face market barriers when entering a new industry. In this paper, we study the manufacturer's production and remanufacturing decisions in a NCR environment and consider two scenarios: the manufacturer enters a new market with (i) the NCR product; (ii) both the new and NCR products. To be specific, two dynamic Stackelberg game models are built to investigate manufacturers' interactions in the NCR environment in terms of product types, business types, and profits. Results show that the manufacturer's failed invasion stems from structural barriers and strategic bar-riers. Interestingly, it is not always optimal for the manufacturer to invade the new market with both the new and NCR products. There is a zone of the NCR product's market competitiveness, in which entering the new market only with the NCR product not only earns a higher profit for the manufacturer but also positively impacts the competitor's profit. In addition, from an environmental impact perspective, we find that entering the new market only with the NCR product is always better than entering with both the new and NCR products. Our results not only shed some light on the aero engine industry but also support the current practices for other industries.