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CS-165 Porters Five Forces - Part 05 Competitive Rivalry v05

CS-165 Porters Five Forces - Part 05 Competitive Rivalry
Case Study (CS-165) - Porter's Five Forces - Part 05 - Competitive RivalryThe rivalry between existing competitors can include: (a) price discounts, (b)promotional campaigns, (c) distribution battles for access to customer, and (d)new product development. This Market Simulation demonstrates how dynamicPrice Competition causes markets to act as Chaotic Systems. Background: Markets are dynamic. Each competitor in a Market will be constantlyadjusting strategy to maximize their Revenue or Profit.In this Market Simulation, three competitors offer partially differentiated Products. Atthe start of each round, each Competitor will independently judge on how a priceadjustment can increase their own profitability. Competitors with more similarproducts will be more price sensitive and quicker to react to the change by theothers. The simulation continues over 50 rounds. The Willingness To Pay (WTP) ofCustomers for each Product isNormally Distributed with thegiven Mean and StandardDeviation (SD). Similar Products have a higherCorrelation than moredifferentiated Products. TheseCorrelations also shape theWTP Customer Distributions. Each Product seeks to maximizeProfitability by adjusting Price byup to +/-10% each round. ThePrice War between the Productscontinues for 50 rounds. The Price and Market Share ofeach Product is collected at theend of each round of the PriceWar. Scatter Plots show the MarketDynamics as the Rivalry betweenthe Products constantly shifts thePrice and Market Share of each. Collect together the Price andMarket Share results of eachProduct so they can becompared round-by-round of thePrice War. Each Competitor independentlyadjusts Price. Competitors spotProfit opportunities each round -causing continuous dynamicchange in the Market. As Prices adjust, the MarketShare of each Product canchange by up to 50%. The Market is a Chaotic Systemin which the Price and MarketShare of each Product tends toorbit around its own area.CompetitiveProductsGenerateWillingness To PayWTP MatrixProductSimilarityProductCorrelationMatrixSimulateDynamicCompetitionProduct AProduct BProduct CPrice Avs. Share ADynamicPricesProductPrice vs.Market SharePrice AMarket Share APrice BMarket Share BPrice CMarket Share CPrice Bvs. Share BPrice Cvs. Share CProduct AProduct BProduct CDynamicMarketShareProduct A / B / CPrice vs.Market ShareGenerate ChaosCharts in Excel Table Creator MatrixDistributions Table Creator CorrelationPairs To Matrix Price War Row Filter Row Filter Row Filter Scatter Plot(JFreeChart) Line Chart(JFreeChart) Column Filter Column Rename Column Rename Column Rename Scatter Plot(JFreeChart) Scatter Plot(JFreeChart) Column Filter Column Filter Column Filter Line Chart(JFreeChart) Column Appender Excel Writer Case Study (CS-165) - Porter's Five Forces - Part 05 - Competitive RivalryThe rivalry between existing competitors can include: (a) price discounts, (b)promotional campaigns, (c) distribution battles for access to customer, and (d)new product development. This Market Simulation demonstrates how dynamicPrice Competition causes markets to act as Chaotic Systems. Background: Markets are dynamic. Each competitor in a Market will be constantlyadjusting strategy to maximize their Revenue or Profit.In this Market Simulation, three competitors offer partially differentiated Products. Atthe start of each round, each Competitor will independently judge on how a priceadjustment can increase their own profitability. Competitors with more similarproducts will be more price sensitive and quicker to react to the change by theothers. The simulation continues over 50 rounds. The Willingness To Pay (WTP) ofCustomers for each Product isNormally Distributed with thegiven Mean and StandardDeviation (SD). Similar Products have a higherCorrelation than moredifferentiated Products. TheseCorrelations also shape theWTP Customer Distributions. Each Product seeks to maximizeProfitability by adjusting Price byup to +/-10% each round. ThePrice War between the Productscontinues for 50 rounds. The Price and Market Share ofeach Product is collected at theend of each round of the PriceWar. Scatter Plots show the MarketDynamics as the Rivalry betweenthe Products constantly shifts thePrice and Market Share of each. Collect together the Price andMarket Share results of eachProduct so they can becompared round-by-round of thePrice War. Each Competitor independentlyadjusts Price. Competitors spotProfit opportunities each round -causing continuous dynamicchange in the Market. As Prices adjust, the MarketShare of each Product canchange by up to 50%. The Market is a Chaotic Systemin which the Price and MarketShare of each Product tends toorbit around its own area.CompetitiveProductsGenerateWillingness To PayWTP MatrixProductSimilarityProductCorrelationMatrixSimulateDynamicCompetitionProduct AProduct BProduct CPrice Avs. Share ADynamicPricesProductPrice vs.Market SharePrice AMarket Share APrice BMarket Share BPrice CMarket Share CPrice Bvs. Share BPrice Cvs. Share CProduct AProduct BProduct CDynamicMarketShareProduct A / B / CPrice vs.Market ShareGenerate ChaosCharts in ExcelTable Creator MatrixDistributions Table Creator CorrelationPairs To Matrix Price War Row Filter Row Filter Row Filter Scatter Plot(JFreeChart) Line Chart(JFreeChart) Column Filter Column Rename Column Rename Column Rename Scatter Plot(JFreeChart) Scatter Plot(JFreeChart) Column Filter Column Filter Column Filter Line Chart(JFreeChart) Column Appender Excel Writer

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Created by: Berlin
Created at: 2019-12-09
On NodePit since: 2021-02-05
Last update: 2024-11-18
Created with KNIME version: v4.3.0
Tags: Market Simulation

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