Research On Market Behavior Of Smart Phone Industry In China

With the past decade's development,the smart phone market has been increasingly expanding in China.Meanwhile,domestic brands are occupying higher and higher market-share in the global smart phone market.In 2016,three of the top five best sell brands in the world are domestic brands,they are HUAWEI,OPPO and vivo and they got only accounted for 26.7% of the global market share.However,the total profits they got only accounted for 4.4% of the whole industry,the other two brands,Apple and Samsung took over 90% of the profit.Thanks to the strategy of low price behavior,Chinese smartphones manufactures have managed to have a relatively high share of the market,but now they are facing the challenge of low profit ratio and how to change the awkward situation is the original purpose of this study.This article is mainly based on the strategic behavior and product differentiation theory that affiliated to the New Industrial Organization theory.And according to which,forms the basic framework of the analysis of Chinese smart phone industry's market behavior.The paper depends on the basis of the investigation of the current industry situation and discusses from the perspective of the market behavior.In order to research the problems like the lacking of core technology,product homogeneity and deficiency of brand construction in Chinese smart phone field,this paper includes methods like qualitative description and quantitative and case analysis.What's more,the relationship between the Conduct and Structure & Performance of smart phone industry is also discussed in the paper.The conclusions of the analysis are as followings:(1)Although it has been theoretically tested that the cooperative mode of R&D is more conducive,Chinese smart phone companies tend to do the research and development independently.The reason is because such a strategy can effectively fit in the differentiation and price behavior of the company,thus to help the company win the soundest position in the market.(2)When it comes to the product differentiation behavior,although Chinese smart phone industry is a medium product differentiation industry,and scale of economies and absolute cost industrial barriers exist,as long as potential manufacturers can find the point of implementing product differentiation strategy,they can successfully enter the market and avoid the various barriers set by the incumbent.(3)For the price behavior,because of the manifest classification of the smart phone demand,Manufactures need to adopt different price tactics respectively.In order to avoid the resistance behaviors from the already-run brands,new-comers should have different price behavior's strategy.For the low-end and middle-end market,companies should focus on enhancing price-performance ratio and adopt different price behaviors in combination with market segmentation characteristics.For the high-end market,it would be wise to adopt low price penetration strategy.Based on product differentiation and price behavior,this paper makes a quantitative and qualitative analysis of the market behavior,market structure and performance of Chinese smartphone industry.In the quantitative analysis of the relationship between product differentiation behavior and market structure,regression method is used to regress the number of new listed models representing product differentiation behavior and HHI representing market structure,and cointegration analysis method is used to analyze the causal relationship and degree between product differentiation behavior and market structure.The empirical results show that the number of new models listed and the market structure variable HHI change in the opposite direction,but the product differentiation behavior on the market structure is better than the market structure on the impact of differentiation behavior.In the qualitative analysis of the relationship between price behavior and market performance,the Lerner index is used to explain the relationship between price behavior and market performance.We found that there are obvious levels in Chinese smartphone market,in different levels of the market,the Lerner index is different in size.In the low-end market,Lerner index is small,the market concentration is low,and the market competition is intense;In the middle and high-end market,Lerner index is large,the market concentration is high and the degree of market competition is low.In the high-end market,when new manufacturers enter the market,they will increase the degree of market competition,forcing incumbent manufacturers to lower prices,improving the performance of the industry.According to the analysis and research above,the paper proposes advice on how to help the current smart phone brands to get into the high-end market.For example,companies can strengthen cooperation on R&D and try to advance their brand to make sure of their product orientation.All in all,I'm writing in the hope of giving some theoretical analysis and advice to smart phone industry on how to get rid of the stuck they are now.