Journal Name:
- Journal of Industrial Engineering and Management
| Author Name | University of Author |
|---|---|
Abstract (2. Language):
Purpose: R&D and advertising have become important means to enhance the competitiveness
of firms’ products. Design an appropriate model to help the firm to make the right choice is
value in supply chain.
Design/methodology/approach: In considering that whether the market is completely
covered or not, we build the strategy selection model for R&D and advertising for two
competing firms and solve the optimal strategy.
Findings: The research results show that when a firm does not take any measures to enhance
competitiveness, another firm will neither. However when one takes measures to improve the
competitiveness, another will do so, also. When two firms must choose one measure to improve
the competitiveness, either in full-covered market or not full-covered market, the two firms will
not choose to do advertising in step, even if the firms do not have to pay additional cost in
advertising.
Originality/value: In the game model, the firm could compare the own profit in different
strategies. According to the above model, the firm choose the right strategy to make the profit
maximize in a vertically differentiated market. And when the firm make the choice, it must
think about other primary elements such as market.
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