RFID-based Entry into the German B2B Parcel Market and its Effect on Competitive Strategies, Prices and Market Shares: The Case of Red Parcel Post

Helmut Dietl, Markus Lang, Martin Lutzenberger and Stephan Wagner ()
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Stephan Wagner: Chair of Logistics Management, Swiss Federal Institute of Technology Zurich

No 84, Working Papers from University of Zurich, Institute for Strategy and Business Economics (ISU)

Abstract: This paper analyzes the market entry of Red Parcel Post, a new player in the German Business-to-Business (B2B) parcel market. Currently there are four large service providers in the German B2B parcel market. Each of these incumbent providers operates - albeit with varying degrees of automation - with a classical multi-hub-and-spoke network. Red Parcel Post plans to enter the B2B parcel market with a completely new parcel delivery system for the delivery of B2B parcels throughout Germany based on a new transport network design, and RFID- and GPS-based operations. Such operations shall enable the entrant to offer new services to potential customers and realize lower costs and prices than the established firms. We describe the market and contrast the incumbents' and the entrant's business strategies. Moreover, we develop a model to analyze the effect of the entrant's market entry on competitive strategies, market shares, prices, costs and profits. First, we solve the game-theoretic model analytically to derive qualitative results. In a second step, we simulate market entry and competition by calibrating the model with data from the German B2B market illustrating the impact of market entry in various scenarios.

Keywords: Market entry; incumbent; competitive strategies; market shares; B2B parcel market; Cournot model; calibration (search for similar items in EconPapers)
Pages: 28 pages
Date: 2008-08, Revised 2009-10
New Economics Papers: this item is included in nep-com, nep-cse, nep-mic and nep-mkt
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Citations: View citations in EconPapers (1)

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http://repec.business.uzh.ch/RePEc/iso/ISU_WPS/84_ISU_full.pdf First version, 2008 (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:iso:wpaper:0084

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