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Green investment in a supply chain based on price and quality competition

  • Shanxue Yang
  • Peiqi DingEmail author
  • Guoli Wang
  • Xiaoli Wu
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Abstract

Along with the significant improvement of environmental consciousness, consumers not only consider the price and quality level of products, but also pay more attention to their green level. In order to strengthen the competitive advantage, the manufacturers should consider the green level of products in addition to their price and the quality level. In this paper, we investigate the green investment of two competing manufacturers in a supply chain based on price and quality competition and analyze the effect of green investment on the quality level of the product. The research shows that the manufacturer is willing to make a green investment with a relatively low value of green sensitivity regardless of whether the manufacturer’s rival makes a green investment. Further, we find that the profit of the manufacturer who makes a green investment is greater than the profit of the manufacturer who does not invest regardless of the market size. When both competing manufacturers make green investments, the profit of the manufacturer who is in a large potential market is higher than that of the manufacturer who is in a small potential market. While in a same potential market, the profits of the two competing manufacturers are the same. Finally, we conclude that the green investment counterintuitively will not always improve the quality level of the products.

Keywords

Green supply chain management Price and quality-based competition Green investment Interaction between quality level and green level 

Notes

Acknowledgements

The study of Dr. Wu was funded by the National Natural Science Foundation of China (Grant Number: 71601141) and the study of Yang was funded by Yanta Scholars Foundation of Xian University of Finance and Economics.

Compliance with ethical standards

Conflicts of interest

The authors declare that they have no conflict of interest.

Ethical approval

This study does not contain any studies with human participants or animals performed by any of the authors.

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Copyright information

© Springer-Verlag GmbH Germany, part of Springer Nature 2019

Authors and Affiliations

  1. 1.School of Mathematics and StatisticsXidian UniversityXi’anChina
  2. 2.School of StatisticsXi’an University of Finance and EconomicsXi’anChina
  3. 3.School of ManagementNorthwestern Polytechnical UniversityXi’anChina
  4. 4.College of Economics and ManagementTianjin University of Science and TechnologyTianjinChina
  5. 5.School of Economics and ManagementTianjin Polytechnic UniversityTianjinChina

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