A Model for Integrating Green Product Development Strategies and Supply Chain Configuration Considering Market Share

Abstract

Contemporary consumers seek to purchase better products with new specifications. This approach makes companies mostly the small and medium-sized enterprises (SMEs), producing economically viable quality products. Consumers’ awareness of environmental issues is also increasing, which shows interest in green products. Companies can use green development strategies called greening up, greening over, and greening out strategies to produce a green product. They should focus on all aspects of the market demand for developing a new product to satisfy their customers. Developing a new green product is a double-edged issue for a company’s market size. Deciding on developing a product or keeping to produce old products may cause customer defection. In this study, a mathematical model is formulated to integrate green product development strategies and supply chain configuration, considering the losing market share cost and supplier selection. The findings of this study indicate that the greening up strategy is more appropriate for SMEs, while the greening out strategy is more preferable for companies with greater market size. Also, sensitive analysis shows that government incentive and customer demand for green products affect green development strategies. Validation of the model with a real example as SMEs proves that the greening out strategy is more profitable than other strategies.