Abstract
With the wider recognition of the concept of environmental protection and sustainable development, more and more manufacturers have begun to implement green manufacturing strategies. However, green development is a gradual process, and the coexistence of ordinary and green products is common. This paper examines the competition between ordinary products and green ones based on supply chains, and discusses the impact of retailers’ horizontal cooperation on pricing, greenness, market demand, profit, and other related decisions and results. Model solutions and numerical experiments have shown that consumers’ green preference (CGP) has a positive impact on the results of green products and negative effects on those of ordinary ones; however, the impact of competition intensity (CI) is more complex, and the trend tends to change if it exceeds a certain critical value. In general, cooperation encourages retailers to raise prices and make manufacturers lower wholesale prices, but the retail and wholesale prices of green products are always higher than the corresponding prices of ordinary ones. Market demand can be reduced due to cooperation, but it is conducive to strengthening green products’ greenness. However, if CI exceeds a certain threshold, the greenness will be weakened by cooperation. Both retailers can benefit from cooperation easily and they always reach a win-win situation, but manufacturers suffer badly as a result. Nevertheless, when CI is weak, cooperation will bring a greater profit improvement to the whole chain of ordinary products; in this case, if a retailer is willing to compensate for a manufacturer’s profit loss and help it benefit from cooperation, the manufacturer will encourage the retailer to cooperate horizontally with the green retailer, but the green chain will be seriously damaged. When CI is strong, the greenness of green products is not obvious enough, and cooperation can bring some chances to achieve a win-win situation for two chains; if the green retailer can obtain a larger share from cooperation under this scenario, it can also enable its manufacturer to obtain compensation and change the profit increment from negative to positive. From an overall perspective, when CI is very weak or very strong, horizontal cooperation is conducive to improving the profit of the entire supply chain competition system, but when CI is relatively flat, independent operation for each chain is more advantageous; if the competition status is stable and unchanged, independent competition will be superior to horizontal cooperation.
Highlights
In order to seek sustainable development, manufacturers have to consider green production and operation, such as GE, Responsible Editor: Philippe GarriguesLenovo, and Linglong Tire (Yang et al 2020), which extend to green supply chain management
Strengthening consumers’ awareness of environmental protection and enhancing their sensitivity to green products are conducive to promoting the development of green supply chains
consumers’ green preference (CGP) does not affect the possibility of Pareto improvement of two chains, but when competition intensity (CI) is weak, there is no possibility of a win-win situation for both chains
Summary
In order to seek sustainable development, manufacturers have to consider green production and operation, such as GE, Responsible Editor: Philippe Garrigues. Manufacturers of ordinary products will still exist and compete with those of green ones for a few months even a few years, based on their respective supply chains. We will examine two independent supply chains, with each chain having its own manufacturer and retailer, which are in competition because they provide ordinary and green products respectively. It is easy to impress consumers by using indicators such as energy saving and noise of air-conditioning, preservation time and power consumption of refrigerators, gas utilization rate, and exhaust temperature of water heaters This shows that consumers’ sensitivity to green products will increase the market demand for green products but inhibit that for ordinary ones. Based on the above statement, this paper will investigate whether cooperation between retailers can help raise or reduce the demand for green products and benefit or harm the chains . Proofs of theorems and propositions are enclosed in Appendix 2
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