| As global resource and environmental issues intensify,many manufacturing enterprises opt for the concept of a circular economy,striving to achieve a dual boost in economic growth and environmental benefits.For these enterprises,the circular economy presents both opportunities and challenges: on one hand,it restricts the utilization of resources and the environment in business activities,on the other hand,it harbors substantial economic value.In this context,tradein programs have become one of the prominent methods for the manufacturing enterprises to practice the concept of the circular economy,aiding these enterprises in closing the materials loop and stimulating market demand.As product iteration accelerates,in recent years,the government has strengthened its policy support for the trade-in program,emphasizing its positive role in optimizing economic structures,facilitating industrial transformation and upgrading,and advancing the formation and development of new productive forces.The Trade-in program transforms the traditional linear business model into a circular mode and penetrate the entire life cycle of a company’s product,encompassing the processes of recycling,R&D and production,and marketing,thus interacting with the operational decisions of these processes.In practice,it is observed that in each process of a product’s lifecycle,manufacturing enterprises have an array of sustainable operation strategies to choose from,and different enterprises often select different strategies.For instance,in the recycling process,Huawei re-sells the used products from the tradein program directly to the secondary market,whereas Apple dismantles these used products into raw materials,re-introducing these materials into the next production cycle.These two cascading utilization strategies interact with trade-in programs,triggering changes in market demand,pricing,profits,and environmental benefits.Moreover,the specific implementation of the same strategy also differs among manufacturing enterprises.For example,Apple provides additional trade-in rebates for its own and other brands’ users,while Samsung does not engage in this business activity of providing additional trade-in rebates.Nevertheless,the selection and implementation of these sustainable operational strategies lack theoretical basis and discussion.Based on this,this paper considers the three basic processes of the entire product life cycle,namely the R&D and production process,the marketing process,and the recycling process,and sorts out the specific sustainable operation strategy cases of manufacturing enterprises in each process,including the public reports of companies such as Apple,Dell,Huawei,Lenovo,and Panasonic.Considering that these sustainable operation strategies trigger changes in decisions such as market demand and pricing through the trade-in program,this paper theorizes the aforementioned real-world issues,attempting to answer the following five research questions:(1)In the entire product life cycle,how do manufacturing enterprises choose the optimal sustainable operation strategy and its strategy combination? And how do the strategy choices and decisions in each process interact with the trade-in program?(2)In the recycling process,what is the applicability of the secondary market strategy and the supplier support strategy? What are the optimal cascading utilization selection strategy and the corresponding boundary conditions? How to adjust the contradictions between the internal profit demands and the external economic environment brought about by the implementation of the two strategies?(3)In the R&D and production process,what is the applicability of the durability design strategy and the recycling process innovation strategy of manufacturing enterprises? What are the factors that influence the two technological innovation strategies and their mixed strategies to be optimal for the economy and the environment,and how do they influence?(4)In the marketing process,what is the applicability of the refurbishing strategy,the extended warranty strategy,and the trade-in strategy?What are the optimal economic and environmental strategies and the corresponding implementation conditions? What factors and how do they influence these implementation conditions?(5)What are the implementation conditions for differential pricing strategy of the trade-in program? And how is the additional trade-in rebate priced?To further explore the above issues and help manufacturing enterprises gain a deeper understanding of the applicability of sustainable operation strategies in each process from both economic and environmental perspectives,as well as the mutual influence mechanism with the trade-in program,this paper comprehensively uses literature research,marketing theory,game theory,optimization methods and theory,numerical simulation and other methods.Based on the theoretical modeling of consumer behavior,comparative research on different sustainable operation strategies in each process is carried out,and the optimal strategy selection combination and corresponding implementation condition framework are given.Firstly,this paper studies the product durability design and recycling process innovation strategy in the R&D and production process.By characterizing the impact of these two technological innovation strategies on consumer behavior in the trade-in program,a decision optimization model of manufacturing enterprises for product durability design,recycling process innovation,and their mixed strategies is constructed.By comparing the profits,pricing decisions,market demand,consumer surplus,and environmental impact under the equilibrium state of these three strategy models,the optimal economic and environmental strategy is obtained.The research shows that the production cost of manufacturing enterprises plays a key role in strategy selection.In terms of profit increase,the recycling process innovation strategy is superior in low-cost industries;the durability design strategy is superior in high-cost industries;and the mixed strategy is superior in medium-cost industries.At the same time,this paper provides a set of boundary conditions for the economic optimal strategy to also be the environmental optimal strategy,thus providing a theoretical basis for enterprise management decisions and government environmental regulation.Secondly,this paper conducts a comparison of the trade-in strategy,refurbishment strategy,and extended warranty service strategy in the marketing process.Considering that the role of the refurbishment strategy and the extended warranty service strategy in the business practice of the circular economy concept is similar,namely,to influence environmental and economic performance by extending product life cycle and improving marginal effect,this paper compares these two strategies with the trade-in strategy respectively.By formulating the impact of these three strategies on consumer behavior decisions,a decision optimization model for manufacturing enterprises is constructed,and then the equilibrium state of the strategy models is compared.The research shows that,in terms of profit increase,the trade-in strategy is more applicable to medium and low-cost industries and can be used to solve the problem of high product durability;while the extended warranty service strategy is more applicable to medium and high-cost industries and can be used to solve the problem of increasing production costs.Similarly,this paper also provides a condition framework for these three strategies and their mixed strategy to be optimal economic and environmental strategy simultaneously,thus helping enterprise managers to further understand the applicability of these three sustainable operation strategies in the marketing process from both an economic and environmental perspective.Furthermore,this paper further studies the role of price discrimination between manufacturing enterprise brands caused by the trade-in differential pricing strategy in the marketing process.We consider three possible strategy scenarios,i.e.,neither brand implements trade-in differential pricing strategy,one brand implements while the other does not,and both brands implement this strategy.Based on the Hotelling model portraying consumer choice behavior between two competing brands,the demand function in each strategy scenario is derived.By comparing the profits and market demand under the equilibrium state of three models,this paper provides a decision-making framework for whether brands should implement differential pricing strategy based on their competitive advantages in the market.Moreover,the paper extends the model to take into account trade-in behaviors within a brand,thus analyzing the optimal pricing issue in the additional trade-in rebated under differential pricing strategy.It also considers imperfect market conditions,thus providing a strategic choice framework for special industry scenarios.Theoretically,this paper provides decision-making basis for trade-in differential pricing strategy for managers of manufacturing companies and helps them gain a deeper understanding of the role of price discrimination in the differential pricing strategy.Finally,this paper studies two cascading utilization strategies in the recycling process,which are the secondary market strategy and the supplier support strategy.By constructing a decision optimization model for these two cascading utilization strategies through a two-stage consumer choice model transformed into a one-stage expandable infinite cycle model,the optimal pricing,profit,environmental impact,and consumer surplus under equilibrium conditions in the two strategy models are compared.The research results indicate that the product durability and the value of used products in the secondary market are key to the optimal strategy choice of manufacturing companies and suppliers.Moreover,the implementation of these two cascading utilization strategies brings about two contradictions,namely the profit contradiction in the strategy choice between internal manufacturing companies and suppliers and the external economic environment contradiction.Through a small-scale calculation example,it is found that adjusting the transfer payment price of raw materials can simultaneously adjust these two contradictions,and relative to other methods,its effect is the best.Also,a specific analytical framework for adjusting these two contradictions is provided.Theoretically,the paper offers the applicability of these two cascading utilization strategies,thus providing theoretical support for business decision-making and government regulation. |
