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RFID-based Entry into the German B2B Parcel Market and its Effect on Competitive Strategies, Prices and Market Shares: The Case of Red Parcel Post

Author

Listed:
  • Helmut Dietl

    (Institute for Strategy and Business Economics, University of Zurich)

  • Markus Lang

    (Institute for Strategy and Business Economics, University of Zurich)

  • Martin Lutzenberger

    (Institute for Strategy and Business Economics, University of Zurich)

  • Stephan Wagner

    (Chair of Logistics Management, Swiss Federal Institute of Technology Zurich)

Abstract

This paper analyzes the market entry of Red Parcel Post, a new player in the German Business-to-Business (B2B) parcel market. Currently there are four large service providers in the German B2B parcel market. Each of these incumbent providers operates - albeit with varying degrees of automation - with a classical multi-hub-and-spoke network. Red Parcel Post plans to enter the B2B parcel market with a completely new parcel delivery system for the delivery of B2B parcels throughout Germany based on a new transport network design, and RFID- and GPS-based operations. Such operations shall enable the entrant to offer new services to potential customers and realize lower costs and prices than the established firms. We describe the market and contrast the incumbents' and the entrant's business strategies. Moreover, we develop a model to analyze the effect of the entrant's market entry on competitive strategies, market shares, prices, costs and profits. First, we solve the game-theoretic model analytically to derive qualitative results. In a second step, we simulate market entry and competition by calibrating the model with data from the German B2B market illustrating the impact of market entry in various scenarios.

Suggested Citation

  • Helmut Dietl & Markus Lang & Martin Lutzenberger & Stephan Wagner, 2008. "RFID-based Entry into the German B2B Parcel Market and its Effect on Competitive Strategies, Prices and Market Shares: The Case of Red Parcel Post," Working Papers 0084, University of Zurich, Institute for Strategy and Business Economics (ISU), revised Oct 2009.
    • Handle: RePEc:iso:wpaper:0084
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    Cited by:

    1. Günther Zäpfel & Michael Bögl, 2016. "An adaptive structure of a hub-and-spoke system with direct and depot shipments in the case of volatile demand over time," Journal of Business Economics, Springer, vol. 86(7), pages 697-721, October.

    More about this item

    Keywords

    Market entry; incumbent; competitive strategies; market shares; B2B parcel market; Cournot model; calibration;
    All these keywords.

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