Defending Mail Markets against New Entrants: An Application of the Defender Model
AbstractIn this paper we analyzed the strategic competition between incumbent postal operators and market entrants in liberalized letter markets based on the “defender consumer model” pioneered by Hauser and Shugan (1983) and derived qualitative normative implications on how an established firm should defend its profits when facing an attack by a new competitive product. Our results extend the literature on competition in liberalized mail markets by combining pricing and positioning strategies from a marketing perspective. Our analysis highlights that incumbent postal operators can defend their market shares by differentiating their services along one or more quality dimensions. Postal services are not necessarily homogenous. If postal operators focus solely on pricing strategies they will run into the more serious problems than if they compete on quality too.
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Bibliographic InfoPaper provided by Swiss Economics in its series Working Papers with number 0027.
Date of creation: Jul 2011
Date of revision:
Defender model; mail market; competition; postal sector;
Find related papers by JEL classification:
- L50 - Industrial Organization - - Regulation and Industrial Policy - - - General
- L87 - Industrial Organization - - Industry Studies: Services - - - Postal and Delivery Services
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-07-27 (All new papers)
- NEP-COM-2011-07-27 (Industrial Competition)
- NEP-HME-2011-07-27 (Heterodox Microeconomics)
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6121, University Library of Munich, Germany.
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