Simultaneous competitor and customer diffusion: a market growth model based on market space and competition

Marion Debruyne

Vlerick Leuven Gent Management School Working Paper Series from Vlerick Leuven Gent Management School

Abstract: This paper adds addresses the interaction between competitive dynamics and market evolution. Specifically, it focuses on the development of the market of a new product, in terms of customer adoption as well as competitive entry. The objective of this paper is to develop a model for the growth stage of a new market that addresses the supplier and customer diffusion process and the interaction between them. The contribution of our approach is threefold: (i) the development of a competitor diffusion model, (ii) the combination of a competitor diffusion model with a customer diffusion model, recognizing the interplay between competitive entry and market-level diffusion, and (iii) the recognition that competitive entry effects in the diffusion model are endogenous, resulting from the entry decisions of firms.

Pages: 32 pages
Date: 2006-04-20
New Economics Papers: this item is included in nep-com, nep-cse and nep-ent
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