Network Operators' Dynamic Competitive Strategic Analysis

Network industries, which have particular technical and economic features including network effects and switching costs of subscribers, occupy the certain natural monopoly to some extent, while generally undergoing a industrial governance innovation to deregulate and introduce further competition. Accompanying with regulatory evolution, competiton between network operators turns to significantly dynamic competiton with frequent interactivities. This challenges network operators to innovate their competitive strategies. For this reason, with background of regulation evolution, comprised of such theories about industrial organization, dynamic competition and network competition and applying the game theory, the study with foresight and insight about dynamic competitive strategies analytical theories and methods of network operators, should contribute to enhance the dynamic adaptability and building the rational strategic thinking ways. Therefore, this study is worthy of deep academic research with positive value and competitive applicable role. It can also enrich the theories of strategies, and help network operators participate in network competition.This study focuses on the dynamic competitive strategies of network operators in dynamic competiton environment, which introduces game-based dynamic competition interaction analysis into strategic analytical process,which is mainly implemented with mobile telecommunication market competition.First, network industries and network markets and their characteristics are identified and analyzed, while main participants and their relationship in network industries are identified. Further, the present regualatory theories of natural monopoly and the regulatory evlution are surveyed with emphasis upon the essential trends of deregulation and stimulating competition in network industries. Accordingly, the analytical ways about network competition are categorized into industrial governance level and network operators'level. After discussing the trend of dynamic network competiton, it is proposed that dynamic competition should require network operators to define dynamnic competitive strategies and implement the integrated strategic process. Besides, the basic theory and its analytica methods, tools of dynamic competitive strategies are surveyed in detail .And, the dual-layer principal-agentrelationship link problem of industrial governance in China is discussed with results that industrial conducts are not only up to the exogenous schemes planning such as regulation and ownship at industrial level, but also the competiton efforts of network operators themselves at micro level,which implies the necessity of the study. In the study, this paper endeavors to integrate the traditional structural strategic analysis, resource-basd strategic analysis and dynamic competitive strategic analysis into the dynamic strategic analytical framework, which is comprised of four factors analysis about structural factors, resource factors,rule factors and dynamic factors.And, the analytical framework, which applies the analysis of competitive interaction and competitor analysis, is integrated into lifecycle-based strategic integrated process model, applying the game theorys as main modeling tool. Compared to traditional strategic analysis, the analytical model can be better adapted to the dynamic and unstable network competition Based on this, the mobile competition and its development inland and overseas is introduced. The basic game-based modeling methods is also introduced into mobile competition, the mathamatical modeling methods of market participants as well.Then, the competitor analysis at market-entry phase, the structural and resource factors analysis is taken, which emphasizes and analyzes the dynamic and rules factors. As results, the possible strategic choice martric of the newcomers and the existing network operatorsThis paper summarized the characteristics of in-market competition and mobile competition, and further investigates the typical competition scenarios, such as price war, differentiation competition between mobile operators, with game–based competition interaction analysis. As results, with homogenous products, price war is hard to avoid. However, in multi-phase sequential price competition, more differentiation will benefit to the operator itself. And, the fierce low-end incremental market competition faced by mobile operators in present market is also discussed with conclusion that the utilities of cellular tariff received by subscribers is the key factor determining the competition result, regardless of operator's scale econmy and first-move advantages.Finally, the proposed dynamic strategies analytical framework and its tools are applied by a certain mobile operator's in the local mobile market. By competitive analysis about the basic strategic factors, the tariff plans innovation is analyzed. Based these, objective basic advices about dynamic strategic advices are proposed to the mobile operator, which is thereafter applied in the practical competition, with better performance of consolidating the operators dominant strategic situation and enlarge the advantagous leading gap to the rival. This proves that the propsed dynamic strategies analytical framework can be applied to direct the strategic competition.The innovative points of this paper includes that, a integrated network operators'dynamic strategic analytical framework not only integrating the traditional strategic analysis, but applying competitors analytical model and non-cooperative competitive interaction analysis. Further, network competition at market-entry phase and in-market phase are discussed in detail,proposing the dynamic strategic choice of network operators with different market status and their necessary strategic transitional mechanism. Besides, industrial conducts of different industrial governace schemes in network industries are also analyzed. The coclusion is that conducts preference have important influence upon the industrial governance and managers'efforts in regulated companes.The study about dynamic strategies of network operators, as an edging academic research field, requires various and consolidated knowledge foundations and relates to various industries with differentiated technical economic features. Its academic research space is promising to be enlarged in the future.