Quality and entry deterrence

2015-01-01
We analyze the role of quality, which we define as an attribute of a product that increases consumers' willingness to buy, as a competitive tool in a quality-price setting. We consider an incumbent's entry-deterrence strategies using quality as a deterrent when faced by a potential entrant. We investigate settings motivating the incumbent to blockade the entrant (i.e., prevent entry without extra effort), deter the entrant (i.e., prevent entry with extra effort), or accommodate the entrant (i.e., allow the entry to take place). We identify conditions under which the incumbent may actually over-invest in quality to deter entrance. More interestingly, we also identify conditions under which the incumbent may decrease his quality investment to make it easier for the entrant to penetrate the market. Our model sheds light on entry scenarios of particular platform product markets such as the entry of Xbox to the video game console market.
EUROPEAN JOURNAL OF OPERATIONAL RESEARCH

Suggestions

Quality control charts based on ranked set sampling under various symmetric distributions
Egemen, Didem; Sürücü, Barış; Department of Statistics (2013)
Quality of a product is a very important property for producers and service providers, and can be maintained by statistical quality control methods. One of these methods is Shewhart control chart, which is the most frequently used in the literature. Construction of accurate control limits is the main issue in this method and it strictly depends on the efficiency of the estimators used to construct control limits. In this thesis, a new sampling method ranked set sampling (RSS), which is more efficient than s...
Robust design with binary response using Mahalanobis Taguchi System
Yenidünya, Barış; Köksal, Gülser; Department of Industrial Engineering (2009)
In industrial quality improvement and design studies, an important aim is to improve the product or process quality by determining factor levels that would result in satisfactory quality results. In these studies, quality characteristics that are qualitative are often encountered. Although there are many effective methods proposed for parameter optimization (robust design) with continuous responses, the methods available for qualitative responses are limited. In this study, a parameter optimization method f...
Procurement and information sharing games in group purchasing
Ünel, Sevgi; Savaşaneril Tüfekci, Seçil; Department of Industrial Engineering (2014)
In this thesis, the value of collaboration and information sharing is analyzed for a market with two asymmetric competitive buyers. On one side of the chain, the supplier offers quantity discount. On the other side of the chain, the buyers may or may not engage in collaboration on purchasing quantity. The price is inverse linear function of the quantity supplied in the market. Buyers may receive a signal about uncertain market demand. Each buyer decides whether to share the signal with the other buyer and t...
The influence of product appearance on perceived product quality in reference to washing machines
Veyisoğlu, Ahmet Burak; Hasdoğan, Gülay Fatma; Department of Industrial Design (2010)
Product quality is regarded as one of the most important factors that consumers consider while purchasing products. However, contrary to objective quality, perceived product quality includes consumer's judgment about the overall superiority or excellence of a product. This study mainly concentrates on the relationship between product appearance and perceived product quality especially for durable goods. The definitions of product quality and perceived product quality are reviewed to explain different dimens...
Design in Context Product Design through Local Initiatives
Doğan, Çağla (2002-07-17)
Current notions of sustainability within the field of product manufacturing largely depend on business strategies that are predominantly 'top-down ' approaches. However, it is theoretically and practically naive and also unworkable for conventionally structured large manufacturing businesses to simply put on the vestments of sustainability. Many of the structures, philosophies and raisons d'etre are inherently and systemically in conflict with an holistic understanding of sustainability. In order to positiv...
Citation Formats
Ö. Karaer, “Quality and entry deterrence,” EUROPEAN JOURNAL OF OPERATIONAL RESEARCH, pp. 292–303, 2015, Accessed: 00, 2020. [Online]. Available: https://hdl.handle.net/11511/40541.