Growth Dynamics in New Markets contains a dynamic case study and simulations that reveal what it takes to successfully introduce a product into a new market. Written by experts in the field, the text and companion website include a compelling simulation game and a variety of simulation models. Using the simulation game and computer models, readers are challenged to design and put in place a strategy about product introduction and competitive behavior. The simulation models build on each other to help to arrive at a comprehensive understanding of product uptake as well as market development and competitive dynamics. The authors present different approaches for enhancing the models and offer guidance for applying them to real-world problems.

This groundbreaking text clearly shows how to develop maps of dynamic systems, formulate candidate policies and evaluate them based on the simulations. It also reveals how to use computer simulations to understand what decisions could and should be made, when to make them and how intensive they should be. The authors present an interactive approach that:

Contains an innovative combination of a case study, simulation game and simulation models for developing the skills to introduce a product to the marketplace
Offers targeted questions that help to enhance the understanding of the material presented
Presents detailed answers and solutions to a number or real-world business challenges
Features video tutorials that explain how the simulation experiments are implemented and interpreted
Aids in the development an action-oriented, pragmatic understanding of the underlying forces in business

Designed for students of business administration, management, industrial engineering, informatics, engineering, and public policy, Growth Dynamics in New Markets offers an innovative approach that combines the practice of dynamic reasoning and the use of simulation to design and test possible policies.

Auteur

Martin FG. Schaffernicht, Facultad de Economía y Negocios, Universidad de Talca, Chile.

Stefan N. Groesser, School of Engineering, Bern University of Applied Sciences and Institute of Management, University of St. Gallen, Switzerland.

Contenu

Preface IX

Invitation to Explore IX

What Will You Learn? XIII

What Are the Components of the Book? XIV

What Is the Structure of the Book? XV

Who Is the Book for and How to Use It? XVII

Before You Start XIX

Acknowledgments XIX

References XIX

1. Introducing a Durable Product in a New Market 1

1.1 Introduction 1

1.2 Your Briefing for the Business Challenge in Plutonia 2

1.3 Managing NewTel's New Business in the Simplest Scenario: Business as Usual 14

1.4 A Competitive Scenario: Compete for Customers 19

1.5 Outcomes of Both Scenarios in Terms of Key Performance Indicators 27

1.6 Chapter Summary 30

1.7 Questions and Challenges 30

1.8 References 31

2. Capturing Customer Dynamics Driven by Diffusion 33

2.1 Introduction 33

2.2 Diffusion: A Regular Dynamic in Social Systems 34

2.2.1 Going viral 34

2.2.2 A Story about Selling Mobile Phones 36

2.1.3 Diffusion Is Based on a Network of Variables and Causal Relationships 44

2.1.4. Causal Diagrams Reveal the Causal Structure 52

2.2 Structure and Dynamics of New Product Diffusion 68

2.2.1 Your First Simulation Model 68

2.2.2 Feedback Loops 75

2.2.3 Reinforcing Feedback and Exponential Growth 77

2.2.4 Balancing Feedback and Goal-seeking Behaviour 88

2.2.5 When the Two Feedback Loops Are Interconnected 101

2.8 Chapter Summary 112

2.9 Questions and Challenges 112

2.10 References 114

3. Effects of a Limited Product Life Cycle Duration 118

3.1 Introduction 118

3.2 The Concept of Life Cycle Duration and Its Effects on Customer Dynamics 119

3.3 Tracking Accumulated Purchases and Accumulated Customer-months 146

3.3.1 Structure 146

3.2.2 Behaviour 150

3.4 Chapter Summary 152

3.5 Questions und Challenges 153

4. The Effect of advertising spending 156

4.1 Introduction 156

4.2 Turning the Attention of Potential Customers to a Product 157

4.3 The Effect of Fixed advertising spending 158

4.3.1 Structure 158

4.3.2 Behaviour 162

4.4 The Effect of Constant advertising spending with a Limited life cycle duration 173

4.4.1 Structure 173

4.4.2 Behaviour 175

4.5 The Effect of Advertising for One Month 181

4.5.1 Structure 181

4.5.2 Behaviour 186

4.6 How Many Current Customers are Won by Winning One new customer? 192

4.6.1 Structure 192

4.6.2 Behaviour 193

4.7 Chapter Summary 197

4.8 Questions and challenges 197

4.9 References 199

5. Financial Resources 200

5.1. Introduction 200

5.2. The Structure of Revenues 201

5.2.1 The Direct Influence of prices on revenues 201

5.2.2 The Indirect Influence of price and life cycle duration on Potential customers' Purchasing Decisions 204

5.2.3 How the effective monthly price Affects new customers and total revenues 215

5.3. The Structure of Costs 220

5.3.1 The Components of total costs 220

5.3.2 Reducing Service costs by Improving Processes 222

5.4. Behaviour: Customer Dynamics and the Accumulation of Profits 229

5.5. Chapter Summary 236

5.6. Questions and Challenges 237

5.7 References 240

6. Analysing the Market Situation with the Simulation 241

6.1 Introduction 241

6.2 Planning the Search for the Highest Possible Accumulated profits 242

6.3 Searching for Optimal Values for the Decision Variables 253

6.3.1 Searching for the Best subscription rate given a Constant sales price and life cycle duration 253

6.3.2 Searching the Optimal sales price given a Constant subscription rate and life cycle duration 257 6.3.3 Searching the Optimal life cycle duration given a Con...