Entrants imitating incumbent's original product improve quality of original product and introduce imitating innovative product, which attracts strategic consumers who rationally choose purchase timing and types. This erodes incumbent's leadership. Hence, faced with this threat, value of integral and modular upgrade strategies adopted by incumbent is studied, where in former strategy, the incumbent could introduce upgraded version via equivalent, increasing or decreasing performance price ratio path, whereas in latter strategy, incumbent could only introduce upgraded version via increasing performance price ratio path. Our conclusions show that for integral upgrade strategy, decreasing performance price ratio path could strengthen incumbent first-mover advantage in respect to market share and expected profits; For modular upgrade strategy, higher product modularity has more positive effects on incumbent maintaining leadership on market share, but have less valuable to incumbent maintaining expected profits advantages.
YANG Guang-yong, JI Guo-jun
. Entry Deterrence Strategy When Selling to Strategic Consumers[J]. Chinese Journal of Management Science, 2015
, 23(11)
: 153
-162
.
DOI: 10.16381/j.cnki.issn1003-207x.2015.11.019
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