Research On Port Competitive Strategy Based On Customer Choice Behavior

In this paper, the design of the non cooperative competition strategy between ports is the research direction. Based on the theory of customer choice, Hotelling model is used for market segmentation. Combined with different port operations, the port competition strategy is quantitative designed by establishing the port Nash equilibrium model. So this paper has great theory significance.This paper studies two aspects of competitive strategy design problems:The frist is studying the ports’ competition that considered the network externality and service differentiation of the port. The importance of the customer makes the share of port hinterland that is affected not only by the port charges, the land transport and shipping costs, but also by the port service level. The network externality is introduced into Hotelling model. Nash equilibrium theory is utilized to study competition strategies design problem for two competing ports. Through establishing Nash equilibrium model based on the two competing ports’ charging and service levels, the optimal charging and service levels for each port are worked out. Our research exactly characterizes how the network externality effects on port charging, service level and their corresponding benefits. The results illustrate that, for the high service level port, charging and market shares of the high service level port are increased with the network externality, which is contrary to the low service level port. Furthermore, a port charging is proportional to its service level. Finally, another important conclusion is drawn that pricing strategies of two competing ports are complementary.The second is having a research on congested port competition strategy. Due to the local ecomomy’ developing, the port congestion is getting worse that need to be solved. Port congestion is introduced into Hotelling model. The market is divided under the assumption that customers obey uniform distribution, and the the optimal pricing strategy of port is obtained by Nash equilibrium. The results show that, the higher level of investment the ports have, the higher capacity the ports will get, and the port price, the hinterland will be increased, profits will be increased as also.