New Market Development Based On Option Games

With the growing competition among companies, strategic importance should be attached to marketing with overall planning. The success of marketing determines that of an enterprise. Therefore, we must take it as a strategy. Enterprise's profits are mainly from sales so that profiting comes to nothing, without a certain sales volume. However regarding a saturated market, it is impossible to enhance the sales volume even if enterprise enlarges marketing strength, at this time enterprise must consider exploit a new market.This article first considers problem from the strategic marketing,uses the real options analyze how an enterprise exploits a new market, which make the enterprise obtain the most superior investment value;Then uses the option games analyze most superior investment decision of both enterprise when exploiting a new market.In this thesis, various factors influencing marketing and the related concept of market segments have been introduced, followed by an analysis of uncertainties in the market development. Then, the author tries to combine market development with real option theory , first the value of one firm and investment thresholds is considered in an uncertain environment; Next the value of both enterprise and investment thresholds is considered in Cournot equilibrum. Then in Stackelberg equilibrum,because of first-mover's and second-mover's advantages,The optimal output and the time of equilibrium investment under duopoly are studied. Decision rules and conditions in equilibrium strategy investment are analyzed. The effect of the investment cost difference and production cost degree on firm value and investment thresholds is discussed. Finally, the effect of the marketing is considerde,the investment thresholds that firm decides to adopt the marketing strategy is elicited.