Modelling competition in global LCD TV industry

Bi-Huei Tsai and Yiming Li

Applied Economics, 2011, vol. 43, issue 22, 2969-2981

Abstract: This work analyses global shipments of Liquid Crystal Display Televisions (LCD TVs) by considering mutualism among multiple generations of LCD TVs. In applying the revised Lotka-Volterra equations, this study analyses the dynamic competitive relationship among producers of 26-, 32- and 37-inch LCD TVs. Equilibrium analysis is used to evaluate whether future shipment orbit could converge to equilibrium status. The prediction abilities of Bass growth model and Lotka-Volterra model are further compared to examine whether the Lotka-Volterra model, which incorporates the mutualism among multi-generation LCD TVs, performs better. The result shows that the relationships between 26- and 32-inch LCD TVs, and 37- and 32-inch LCD TVs are commensal. Sales of 32-inch LCD TVs are promoted by increased sales of 26- or 37-inch LCD TVs. Results of the equilibrium analysis indicate that competition among various sizes of LCD TVs will not be stable. The interactions among multiple generations of LCD TVs will influence each other, leading to great fluctuations in sales. Since this study incorporates the interactive relationships among various sizes of LCD TVs in the proposed Lotka-Volterra equations, the ability of the Lotka-Volterra model to predict the market evolution of LCD TVs is superior to that of the Bass model.

Date: 2011
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DOI: 10.1080/00036846.2010.530222

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