Competitive Research, Networking Products Based On Product Differentiation Theory

Network externalities reflect the essential characteristic of network economy, and put great impact on differentiation competiton between network goods. Due to the influence of network externalities, competition between companies that provide network goods presents some new phenomena, rules and traits. So it is necessary for such companies to reflect current competition strategies and the profit model. At the age of network economy, companies should probe into new competition tactics in order to gain more competitive advantages by means of the impact of network externalities on competition.Above-mentioned questions need scientific answers, which can be beneficial to the robust development of network industry. Considering the influence of network externalities, the dissertation mainly studies the competitive rules and tactics of network goods based on differentiation competition theory. The dissertation discusses such questions as market dominant statigy, customers locked-in, standardization competition and optimal market structure about network goods, and puts forward and demonstrates undermentioned theoretic propositions: (1) market share (not quality) is not only the focus of competition, but also the key of market success;(2) network externalities and product compatibility are the main factors that make customers locked-in, and the switching cost leads to the gain of companies' profit, but the loss of net social welfare;(3) under the condition that customers are locked-in, discrimination price tactic can bring more profit than flat price tactic, but does not cause the change of social welfare;(4) when network externalities exist, the followers can surpass the leaders by proper standardization competition, and become the leaders of market;(5) under some conditions, absolute monopoly is not the optimal market structure of network industry.Finally, the dissertation discusses the negative network externalities and the phenomina of network congestion, and puts forward the suggestion that it is necessary to improve the usage efficience of network resource by pricing mechanism, so a pricing mechanism based on generalized Vickrey auction is designed at the final stage.