Quality, Pricing, and Release Time: Optimal Market Entry Strategy for New Software-As-A-Service Vendors

报告题目：Quality, Pricing, and Release Time: Optimal Market Entry Strategy for New Software-As-A-Service Vendors

报告人：冯海洋

时间：2016年10月27日10:30-12:00

地点：25楼A区三层C教室

报告人简介

天津大学博士毕业，2016年7月入职学部，信息管理与管理科学系讲师，主要致力于信息产品与服务管理的研究。至今有数篇论文在高水平期刊发表，包括International Journal of Production Economics, Computers & Industrial Engineering, Computers & Operations Research, Soft Computing等。

主要内容

As a new software licensing model, software-as-a-service (SaaS) is gaining tremendous popularity across the globe. In this study, we investigate the competition between a new entrant and an incumbent in a SaaS market, and derive the optimal market entry strategy for the new entrant. One interesting finding is that, when its product quality is significantly lower than that of the incumbent, the new entrant should adopt an instant-release strategy, i.e., releasing its product at the start of the planning horizon. If the initial quality gap of the two products is small, the new entrant is better off adopting a late-release strategy, i.e., deferring the release of the new product until its quality surpasses that of the existing product. We also find that instant-release and late-release are essentially low-quality-low-price and high-quality-high-price strategies, respectively. In addition, we explore the scenario where the two competing products are partially compatible, and characterize the impact of asymmetric incompatibility on the two vendors’ market strategies at equilibrium. We find that the new entrant’s zero-profit region expands as the level of incompatibility between the two competing products increases. Moreover, if the new entrant adopts the instant-release strategy, a higher level of incompatibility will reduce its profit. When the level of incompatibility is sufficiently high, the instance-release strategy may turn out not to be viable for the new entrant. On the other hand, if the new entrant adopts the late-release strategy, a higher level of incompatibility from its product to the incumbent’s, which essentially make it more difficult for the incumbent’s consumers to leverage the cross-product network effects from the new entrant, will increase its profit, whereas a higher level of incompatibility in the other direction may reduce its profit.