The Study On User's Switching Costs Of Electronic Commerce Network And It's Management

Switching costs would influence user's decision in adopting electronic commerce network, thus affecting the development of electronic commerce network. In this paper, we systematically study effect of user's switching costs on development of electronic commerce network, and analyze management problems aiming at user's switching costs in electronic commerce network. It would improve the theory of electronic commerce network, and has important guiding sense to practice of electronic commerce network.Above all, we discuss the composition, classification and measure of user's switching costs of electronic commerce network, and we analyze tentatively influence of user's switching costs on market development of electronic commerce network. Analysis discovers that strong network externality enhances the dynamic and unstableness of competition. When other conditions are same, the higher user's switching costs of electronic commerce networks competing with each other is, the stronger market stability is. Increasing of switching costs would reduce user's motive and behavior of switching.Then, we respectively probe into influence of user's switching costs on growth of electronic commerce network, influence of user's switching costs on price of electronic commerce network and influence of user's switching costs on entry of electronic commerce network market.Concerning influence of user's switching costs on growth of electronic commerce network, we propose a user adopting model of electronic commerce network based on information technology acceptance model. Then we establish a growth competition model of electronic commerce network based on technological innovation diffusion theory to carry on numerical simulation analysis. This numerical simulation analysis reveals the importance of user's switching costs to growth of electronic commerce network. User's switching costs may affect final competition result under given condition, but competition result is influenced by various factors. As one of these factors, the role user's switching costs play is limited and is subject to certain conditions.Concerning influence of user's switching costs on price of electronic commerce network, we establish a unified pricing model to discuss the situation when user scale is huge enough to make each competitive electronic commerce network survive. Analysis discovers that user's switching costs could lead to price rising under this situation. We also establish a two-stage pricing model to discuss the situation when two competitive electronic commerce network platforms simultaneously enter an emerging market in which there are massive potential users. In this situation, we find that increase of market share in first stage could raise price in second stage when user has switching costs. We also find that intensity of network effect of competitor would be considered when price is decided in first stage if user has switching costs. Moreover, if user has switching costs, motive of slightly raising price exists when intensity of network effect is higher than that of your competitor's. Then we discuss the using of user's switching costs and price as competitive methods in markets of electronic commerce network by numerical simulation. We point out that pure price competition is possibly invalid owing to timeliness and dynamic of network competition in practical circumstance. If switching costs cannot be established for your users, it is difficulty to retain these users.Concerning influence of user's switching costs on market entry, we think user's switching costs lead potential entrant into a disadvantageous position in cost, market demand, and estimate of future profit. Therefore, user's switching costs form obstruction of entry, and even possibly form a kind of barriers to entry. Analysis based on proposed model shows that enough intensity of network effect could form barrier to entry, and user's switching costs can strengthen network effect and enhance barrier to entry.Since user's switching costs have important influence on growth, price and market entry of electronic commerce network, we must take seriously the management of user's switching costs. Finally, aiming at the present situation that tangible user's switching costs of electronic commerce network is generally lower and tends to reduce, we analyze user's loyalty management aiming at intangible user's switching costs of electronic commerce network based on the theory of customer relationship management.The market of electronic commerce network is newly-emerging, the content of this study is frontiers. The innovations of this study are as followings.A user-adopting model of electronic commerce network is put forward. Models are established respectively to analyze the influence of user's switching costs on growth, price and market entry of electronic commerce network quantitatively and systematically. Intangible switching costs of users and related management issue are probed.