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New product design strategies with subsidy policies

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Abstract

Industrial development can enrich people’s lives, but it also causes environmental pollution, which is an area of significant concern among governments, consumers, and companies. Governments formulate some environmental policies, which motivate industry by providing greater incentives for green product development. Consumers are classified into two groups — ordinary and green market segments — according to their environmental awareness and attitudes. In this regard, companies need to reconsider their primary product design strategies. By investigating the interactions among customers’ preferences, firms’ product strategies, and government subsidy policies, this paper presents a theoretical model for new product design strategies. After detailed theoretical analysis of such strategies, we found that to motivate firms to choose environmentally friendly product design strategies, governments should inaugurate effective subsidy policies. After simultaneously considering environmental issues and firms’ benefits, we designed a subsidy policy. With such a policy, firms can change their primary product design strategies and develop both green and ordinary products, thereby increasing the firms’ profits and improving the total environmental quality.

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Authors and Affiliations

  1. School of Management, University of Science & Technology of China, Hefei, 230026, China

    Xuemei Zhang, Xiaoyan Xu & Ping He

  2. School of Economics and Management, Fuyang Teachers College, Fuyang, 236037, China

    Xuemei Zhang

Authors
  1. Xuemei Zhang
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  2. Xiaoyan Xu
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  3. Ping He
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Corresponding author

Correspondence to Xuemei Zhang.

Additional information

This research was supported by the National Natural Science Foundation of China under Grant Nos. 70725001, 70821001 and 71201034, and the Provincial Research Institutions of Anhui under Grant No. 2012WLGH03. Systems Engineering Society of China and Springer-Verlag Berlin Heidelberg 2012

Xuemei Zhang is a Lecturer at School of Economics and Management, Fuyang Teachers College, China. She received B.S. degree in industry engineering from Hefei University of Technology, China, in 2006; M.S. and Ph.D. degrees in management science and engineering from University of Science and Technology of China in 2011. Her major research areas are supply chain management, operation research, product design, and service operation. She has authored or coauthored academic papers published in journals such as Omega, International Journal of Innovative Computing, Information and Control, Journal of Software.

Xiaoyan Xu is a Professor at School of Management, University of Science and Technology of China. She received her Ph.D. degree in management science and engineering from the University of Science and Technology of China in 2006. Her research interests include multi-agent systems, supply chain management, and finance management. She has authored or coauthored of more than 50 papers published in technical journals and conference proceedings.

Ping He is an Associate Professor at School of Management, University of Science and Technology of China. He received the Ph.D. degree in management science from the University of Science and Technology of China in 2008. His research interests include supply chain management, operation research, and production flexibility. He has authored or coauthored of more than 12 papers published in technical journals and conference proceedings.

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Zhang, X., Xu, X. & He, P. New product design strategies with subsidy policies. J. Syst. Sci. Syst. Eng. 21, 356–371 (2012). https://doi.org/10.1007/s11518-012-5199-9

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