Optimal Selling and Leasing Strategy for A Dominant Durable Goods Manufacturer Under Sequential Market Entry and Rental Platform Competition

Authors

  • Wei Xiao School of Management, Hefei University of Technology, Hefei, China | Business School, Hohai University, Nanjing, China | Anhui Provincial Key Laboratory of Regional Logistics Planning and Modern Logistics Engineering, Fuyang Normal University, Fuyang, China
  • Haiquan Sun School of Management, Hefei University of Technology, Hefei, China
  • Jing Liu School of Business, Fuyang Normal University, Fuyang, China

DOI:

https://doi.org/10.23055/ijietap.2026.33.5.11091

Keywords:

Supply chain structure, Durable products, Competition, Rental channel, Market size

Abstract

Recent advances in digital and information technologies have significantly enhanced the attractiveness of product leasing through online rental platforms, especially in durable product markets. Prominent manufacturers such as BMW, IBM, GM, and Epson have embraced the leasing model as a means to promote their products. However, limited studies have addressed the impacts of a competitor’s encroachment on the strategic decisions of the dominant manufacturer. In this paper, we develop a two-period dual-channel analytical framework where the dominant manufacturer exists in period 1, and an entrant encroaches on the market share in period 2. Our analysis shows that, no matter how the market size changes, the dominant manufacturer can always benefit from the leasing channel, and it is never in its best interest to adopt a pure leasing strategy in period 1. If the market size shrinks in period 2, the dominant manufacturer prefers selling products directly to consumers in period 1, resulting in a decline in leasing ratios. Moreover, our analysis indicates that the entrant’s encroachment may increase the dominant manufacturer’s profit under specific conditions.

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Published

2026-10-13

How to Cite

Xiao, W., Sun, H., & Liu, J. (2026). Optimal Selling and Leasing Strategy for A Dominant Durable Goods Manufacturer Under Sequential Market Entry and Rental Platform Competition. International Journal of Industrial Engineering: Theory, Applications and Practice, 33(5). https://doi.org/10.23055/ijietap.2026.33.5.11091

Issue

Vol. 33 No. 5 (2026)

Section

Supply Chain Management

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