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Market segmentation strategy in internet market

Author

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  • Ren, Yawei
  • Yang, Deli
  • Diao, Xinjun

Abstract

This paper presents a model to describe the competitive dynamics of web sites on the WWW market and analyze the stability of the model which is composed of one powerful site and two small sites. One of the most important results that emerge from this simple model is that strong competition among websites does not necessarily lead to the demise of the small website on the WWW market. From the stability analysis of the model, we obtain a series of conditions in which small sites can obtain competitive advantages by using the market segmentation strategy.

Suggested Citation

  • Ren, Yawei & Yang, Deli & Diao, Xinjun, 2010. "Market segmentation strategy in internet market," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 389(8), pages 1688-1698.
    • Handle: RePEc:eee:phsmap:v:389:y:2010:i:8:p:1688-1698
    DOI: 10.1016/j.physa.2009.11.023
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    References listed on IDEAS

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    1. López, Luis & Sanjuán, Miguel A.F., 2001. "Defining strategies to win in the Internet market," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 301(1), pages 512-534.
    2. Maurer, Sebastian M. & Huberman, Bernardo A., 2003. "Competitive dynamics of web sites," Journal of Economic Dynamics and Control, Elsevier, vol. 27(11-12), pages 2195-2206, September.
    3. Wang, Yuanshi & Wu, Hong, 2004. "Dynamics of a cooperation–competition model for the WWW market," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 339(3), pages 609-620.
    4. Jiang, Jifa & Cheng, Zhixin, 2006. "The complete strategic classification for a cooperation–competition model in the WWW market," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 363(2), pages 527-536.
    5. Maurer, Sebastian M. & Huberman, Bernardo A., 2003. "Competitive dynamics of web sites," Journal of Economic Dynamics and Control, Elsevier, vol. 27(11), pages 2195-2206.
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    Cited by:

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    2. Wan, Xiaoji & Deng, Guishi & Bai, Yang & Xue, Shaowei, 2012. "The influence of learning and updating speed on the growth of commercial websites," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 391(15), pages 4018-4030.

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