Research On Market Competition Behaviors Of Low Cost Strategy Enterprises

Since 30 years of reforming and opening up to the world, by right of its low cost labor comparative advantage, Chinese manufacturing industry has gained a great deal achievements. However, Chinese industry environment has changed greatly since 2003. The cost comparative advantage is the condition on which Chinese manufacturing industry can develop. The increasing of all kinds of costs leads to the original rough economic development model of China to the rest. Under new circumstances, the important and pressing task faced by Chinese enterprises is how to improve their product market competitive advantage.The dissertation systematically analyzes the market competitive behaviors of low cost enterprises under various hypotheses based on game theory, dynamics theory and modern scientific computing software, and studies Chinese low cost enterprises how to cope with high cost and continue to improve their product competitive advantages.Firstly, the problem of Cournot competition with differentiated goods under incomplete cost information is investigated. Based on enterprise heterogeneous assumptions, both the static and dynamic market competitive behaviors of low cost enterprises are respectively studied. The results show that the key influencing factors of low cost enterprises'performances (equilibrium quantities and equilibrium profits) are the probability of cost function, substitution between products and incomplete information discrimination factor of low cost. The low cost enterprise competes in market by using low price. The equilibrium quantities of dynamic Cournot competition are same to the Bayesian Nash equilibriua results of static Cournot competition.Secondly, the dynamic Bertrand competition of duopoly is studied. The stabilities of dynamic price adjustment system equilibrium points are analyzed by using of bifurcations theory. The simulation results show that the period doubling bifurcation and chaotic phnomena may occur when the bounded rational player accelerates the adjustment speed of its product price. Enterprises'profits are low and unstable in chaotic state. The price chaotic behavior of dynamical system was stabilized on the Nash equilibrium point, by the use of the delayed feedback control method.Thirdly, the pricing problem of low cost enterprise with technology spillover is considered. Firstly, the positioning-pricing of oligopolist is analyzed by using a multi-stage game under the condition of endogenous spillovers. Then, the pricing problem of low-cost enterprise is investigated when spillovers are exogenous. The results of analysis show that, when spillovers are endogenous, the optimal level of differentiation meets the principle of"moderate difference"because of two completely opposite forces. The low cost enterprise expands its cost advantage with higher technology innovation investment, and obtains higher market share by using low-pricing strategy.Fourthly, the differences between Cournot and Bertrand competition are compared under the conditions of asymmetric product costs and asymmetric substitutability by defining low cost discrimination factor function, strong substitute discrimination factor function and competitive advantage discrimination factor function. The result show that the price of low cost enterprise is lower than that of high cost enterprise regardless of which type of competition way. Cournot competition results a lower equilibrium quantity than Bertrand competition for low cost enterprises.At last, the strategic choices of improving product market competitive advantage for Chinese manufacturing industry are investigated. The feasible approaches to improve competitive advantage of different strategic direction are studied by defining dynamic product competitive advantage function. According to the function expression, three types of strategies are summarized for Chinese low cost manufacturing industry from the lay of enterprise: product practical function innovative low cost strategy, occupying high-end market innovative low cost strategy and asymptotic accumulation innovative low cost strategy.