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Network externalities, refers to the value of the product increased with the increase in the number of users, that user utility product consumption increases with the increase in the number of consumers of the consumption of the same product, is a demand side economies of scale. According to the network users to gain different mechanism, network externalities can be divided into direct network externalities and indirect network externalities two forms. In the network economy, network externalities many industries have new features compared with the traditional market, the role of network externalities, corporate competition and the operation of the market have many new features, such as positive feedback mechanism, marginal utility increments, etc.. However, in the market of network externalities, the enterprise should be how to deal with competitors in its market equilibrium What is the difference with the traditional markets, are worthy of further study. This article is based on the point of view of the direct network externalities market incumbent enterprises in the theory of network externalities, market operating mechanism of network externalities and network externalities market competition mechanism analysis, in the reign direct network externalities market vendors through the use of the characteristics of the market, to take appropriate competitive strategy different from the traditional market, the use of the advantage of its own traditional economic advantages and network externalities, product standard advantages to successfully cope with the competition of the market entrants and may become a market monopoly. Network externalities market, market entry has a relatively strong barriers to entry, but take appropriate competitive strategy or may be related to the incumbent to compete in the market even defeat incumbents, entrants, with its cost and technical advantages, \Therefore, the market incumbents not be taken lightly, and should take appropriate countermeasures in order to maintain its leading position in the market. Direct network externalities market incumbent vendor's competitive strategy can be mainly divided into the curb and into the accommodate two categories, which entry deterrence, including pricing strategy and merger strategy; entering accommodate compatible strategies and differences in strategy paper in this four competitive strategy based on a combination of trying to figure out the optimal competitive strategy of the incumbents. By establishing a mathematical model, the use of the extended Hotelling model, vertical differentiation model accessories / machine under the market model to analyze the incumbents to take a different strategy, market equilibrium conditions obtained under different assumptions directly the optimal combination of competitive strategy, network externalities market incumbents can be taken in the four competitive strategy and adopt different competitive strategies combination brought about changes in the social welfare, under certain conditions, for the incumbent to be taken and where kinds of competitive strategy combined with certain referential significance.
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