On the Attractiveness of Product Recovery: The Forces that Shape Reverse Markets.

Product recovery is a major contributor for implementing sustainable business practices. Within such operations, which are either driven by legislation or economic rationales, practitioners face strategic issues concerning reverse market entry and positioning. Although the complexity of acting on reverse markets is widely acknowledged, a comprehensive framework to facilitate decision making in this area is lacking. In an attempt to fill that gap, we develop a model that supports original equipment manufacturers' (OEMs') assessment of the attractiveness of reverse markets. We identify, from a comprehensive literature analysis, in-depth interviews, and engagement with a dozen companies from different countries, factors that influence key characteristics of reverse markets, and consolidate this lengthy list into a comprehensive model intuitively applicable to business practice. The model combines five forces that drive reverse markets: access to recoverable products; threat of independent recovery companies' (IRCs') market entry; rivalry for recoverable products; adverse effects on core business; and remarketing opportunities. We propose for each a set of attributes that influences its power and direction. To demonstrate the efficacy of the model, we apply it in two industry settings: recovery of white goods in the United Kingdom and paper recycling in Germany. The present research enables OEMs to understand the structure and forces that drive reverse markets, identify levers to influence those markets, anticipate market developments, and formulate resilient strategies for product recovery. [ABSTRACT FROM AUTHOR]