A Research On Vertical Production Differentiation Strategy In Mobile-phone Industry In China

The competition between domestic brands and foreign brands has caused wide public concern.Domestic brands have grown from absolutely nothing to 55%market share.But the market share has declined rapidly the next several years.The most important problem is that domestic brands have to share a technology platform MTK for their technology disadvantage,which make them choose the low-end market and fuse some business factors pleasing the low-end cosumers;while foreign brands hold the high-end firmly by their technology advantage,and push out many low-end products competing with domestic brands.Obviously,domestic brands and foreign brands have different position:domestic brands choose low-end while foreign ones choose the hign-end market.In the present paper,we reseach this problem beginning with the strategies of differentiation positioning,raise the question form the angle of position theory in strategic management;then from the view of the theory of industrial organization,we introduce the model of vertical production differentiation,adding the factor of cost,asymmetric technology and the time of game,modify the model,and draw the conclusion:through differentiation position,domestic and foreign brands choose different quality,relaxing price competition from product differentiation, gaining positive market share and postive profits.But the result is different from that of choose the quality simultaneously,because of the asymmetric technology,the low quality firm receives the lower profits and smaller market share.