Analysis Of Network Effect And Internet Companies’Ascendancy, From The Perspective Of Customer Demand

Many Chinese Internet enterprises occupy a large market share in their respective markets, such as Tencent Technology(Shenzhen)’s instant messaging product QQ makes up a huge share of the market in instant messaging market in China, Baidu’s search engine product Baidu accounts for a significant part of the market share in the Chinese search engine market, Alibaba Taobao network Limited occupy the vast majority of Chinese e-commerce market share. Despite the rapid development of science and technology and the fierce competition, these Internet enterprises are still able to keep the business for a long time in the market after obtaining a dominant position. So many companies have been labeled a monopoly label, but these enterprises have their own features, such as these enterprises are benefit for circulation technology innovation, their dominance is not stable. So it is a challenge for antitrust enforcers to supervise. The research topic of this article is the correlative mechanism about the consumer demand, network effects and the dominant position’s formation and maintenance of the Internet enterprise. Specifically, this article will analyze the consumer demand’s fundamental role for the formation of the network effect, the role of consumer demand and network effects for the dominant position’s formation and maintenance of the Internet enterprise, and the Internet enterprises’dominant position is frail. And will discuss the performance of the Internet leading enterprises and its antitrust enforcers.In this paper, research idea is as follows:firstly, ask questions and the related literature is reviewed. Secondly, a detailed analysis of the correlative mechanism about the consumer demand, network effects and the dominant position’s formation and maintenance of the Internet enterprise, and analyze the Internet leading enterprise dominance stability problems. Finally, put forward about the Internet monopoly policy implications, and draw the appropriate conclusions. Specific research framework as follows:The first chapter is an introduction. In the introduction section, this article analysis the market structure of the instant messaging market, and then raises the research topic of this article.In addition, this section introduces the content, the framework and the innovation points.The second chapter is a literature review. According to the relevant level of the research topic, this article has carried on the review to the relevant studies from four aspects. Specifically, they are the study of network effects, the study of the field of Internet network effects, the study of consumer demand has an impact on the enterprise dominance, and the study of the instability of dominant position.The third chapter is the analysis of the consumer demand for Internet products. In the context of the Internet age, the speed of technological innovation, product replacement rate has accelerated, but some Internet companies still maintain a dominant position in ten years time. The fundamental reason is that these companies focus on consumer demand analysis, and as this a fundamental, both companies to develop new products and update old product, the starting point of enterprise are analyzed and meet consumer demand. This part mainly analyses the reasons of the enterprises pay attention to consumer demand and the analysis of consumer demand has the fundamental function to form the user network. On the basis of this, this section puts forward a method of consumer demand by the study of consumer behavior, this chapter also analyzes the path of the consumers choose the QQ.The fourth chapter is the analysis of network effect which based on consumer demand. Internet companies can quickly obtain larger market share directly because the Internet product has the characteristics of the network effect, and the root cause of the network effect can form and maintain originate from enterprise analysis of consumer demand. Enterprises in addition to the purpose of the research and analysis of consumer demand have introduced to meet consumer demand of Internet products, or in order to maintain and enhance the strength of network effects. Thereby enhancing the user of the product viscosity, maintain and increase their market share, this section analyzes the consumer demand analysis has an impact on the function of the network effect, and analyzes some of the competition effect which caused by network effects. And then this article applies it to the QQ, analysis of QQ dominance at the same time, this section also studies the problems such as maintaining strength of network effects.The fifth chapter is the analysis of the Internet leading enterprise advantage position stability analysis. Internet companies to obtain and maintain a dominant position in the root cause analysis of consumer demand and meet, if the leading Internet companies do not have been able to lead the consumer demand, or competitors make more thorough research on the current and future demand, and provides the appropriate product to meet consumer demand, the dominance of these leading companies will be broken. This chapter analyzes the leading Internet companies obtain and maintain dominance’s reason, and analyzes its performance. This section also focuses on the cause of Internet leading enterprise advantage is not stable, this article from consumer demand perspective, specifically from the leading companies, the competitiveness of enterprises and the government’s point of leading Internet companies to discuss the reasons for the instability of dominant position.The sixth chapter is the research conclusion and policy meaning. This chapter summarizes the full text of the conclusions and policy implications. With the increase in the number of Internet enterprise has the market power, many people began to give these companies a monopoly enterprise affixed label, the market also appeared in a number of disputes related to Internet companies, people began to focus on Internet companies to antitrust on the issue, but because of Internet leading enterprise special advantage status and their instability, antitrust enforcers should clear the Internet in addition to the goal of antitrust, but also concerned about consumer actors role in the process of market competition. In addition, this section also referred to the inadequacies of the paper.The main contribution of this paper is to analyze the relationship about the consumer demand, network effects, and Internet companies to maintain a dominant position, and using QQ as an example to the specific instructions. This paper argues that the analysis, creation, to meet consumer demand is the Internet companies to obtain and maintain the dominance of the root causes, and the network effect is the direct cause. Because the Internet product has the characteristics of the network effect, companies can rapidly expand market share by product, but if the company gain market share in consumer demand without further leads, the strength of the network effect of Internet products will quickly fall, subscribers will quickly atrophy, corresponding its dominant position will quickly disappear. In addition, the article also studies the Internet leading enterprise performance and dominant position of vulnerability issues, and propose some ideas about supervise on Internet issues. This article thinks antitrust enforcers should maintain the Internet in addition to the market competition order to promote technology innovation and safeguard the interests of consumers as Internet antitrust goals, the antitrust enforcers must also focus on the role of consumers in the process of competition in the Internet market.