The Application Of Non-Pricing Competition And A Case Analysis

The traditional industrial organization theory `s analysis paradigm is from the structure to conduct, and then to performance. According to this theory, there is a one-way relationship. That is to say, the manufacturer `s conducts depends on the market structure and decides the market performance. But the subsequent development of the industrial organization theory increases importance to the development of the two-way relationship and the dynamic changes among structure, conduct and performance, and stresses that the market conduct could have a significant impact on the market structure and the market performance. At the same time, the introduction of game theory provides us a wonderful analytical tool which acts on the dynamics of the market responses.The market conduct of the competitive manufacturers can be departed into two parts: the price conduct and non-price conduct. Facts show that a simple pricing behavior may cause the failings of both sides and can not become the best competitive strategy of the manufacturers. Though the non-price competition has done all its efforts, we should still hold the price as the independent variable and thus to reflect the evaluation of consumers on products in the market. The analysis which is only based on price-deciding is not very complex, but to study the dynamics response of non-pricing competition, the matter is not that simple. First of all we must choose what is the most effective means of competition, or a combination of several methods. Secondly we must take into account the opponent how to make a strategic response. Finally, we must decide the optimum number of resources invested. All it is not easy to make exact judgment.For these reasons, according to the preceding research about market conduct, the important role of non-pricing competition to manufacturers` strategic conduct is analyzed in this article. Also in the whole article product differentiation, advertising and research and development have been chosen as three major research targets, which are used to analyze the decision-making process of the non-price competition. Based on this, the logical analysis on the application of different strategies has been creatively made. In the final, to illustrate the problem, the article chosen mobile phone market as a case to show that the non-pricing competition is the strategic act of unprecedented prosperity in the market.