Lead Time And Price Equilibrium Decisions Under Two-stage Competition

On two-stage competition market,this paper investigates duopoly enterprises' optimal lead time and price decision on different competitive environment when customers have different choice behavior on different lead time and price response model.On the basis of using the utility function to describe customers buying choice behavior and combining with the enterprise's own ability and cost characteristic,we set up duopoly enterprises lead time and price competition model on three different competitive scenarios,respectively to analyze lead time decision and their equilibrium strategies.First of all,analyzing the duopoly enterprises' optimal lead time and price decision under different competitive situations through establishing the first stage lead time and price competition model of duopoly enterprises.We find the equilibrium outcome depends on the marginal profitability index,which signifies the customer's perceived value and relative attractiveness of different quotation strategies,as well as the enterprise's cost characteristic,and the customer's loyalty to the brand reputation.Enterprises using the larger marginal profitability response model can ask for a higher price,provide a shorter lead time service and have a larger market share.Secondly,we conclude the optimal response mode decision and the equilibrium strategies by comparing the first phase duopoly enterprises profits under different competitive scenarios.As the marginal profitability index of slow quotation strategy is relative large,there exists an equilibrium where both duopoly enterprises adopt slow quotation strategies.While as the marginal profitability index of fast quotation strategy is relative large,if the customer's loyalty to the brand reputation is high,there exists an equilibrium where both duopoly enterprises adopt fast quotation strategies.Otherwise,there exist three equilibrium decisions,namely,both fast,both slow and hybrid quotation strategies.Finally,developing the second stage duopoly enterprises' lead time and price competition model based on considering the heterogeneous customer under different competitive scenarios,and analyzing two-stage lead time,price and profit,and using numerical analysis to get the optimal response decision based on the evolution path,and consider the influence of the customer retention rate on strategy.We find that the second-stage lead time and price strategy will be affected by three factors: the customer retention rate,the first stage' market share the evolution path.Numerical analysis reveals the two-stage equilibrium strategies depends on two factors: customer retention rates and marginal profitability index.When customer retention rates is low,the equilibrium outcome is same as the first-stage.Otherwise,the marginal profitability is weakened.