THESIS
2000
viii, 147 leaves : ill. ; 30 cm
Abstract
This thesis studies consumers' and suppliers' decisions on IT products. Two different categories of IT products are considered: physical ITs (where I use computer platforms as representatives) and information products. To study the competitive conditions of physical IT products, I set up discrete choice models to examine the choice criteria of customers. Unlike traditional choice analysis, which are often conducted at the product level, I focus on the IT vendor level. The selection of IT vendors involves additional considerations like brand effect or brand width, which are often not applicable to individual products. A discrete choice model using IT vendors as choice alternatives allows us to focus explicitly on these decision criteria and at the same time estimate their effect sizes. T...[
Read more ]
This thesis studies consumers' and suppliers' decisions on IT products. Two different categories of IT products are considered: physical ITs (where I use computer platforms as representatives) and information products. To study the competitive conditions of physical IT products, I set up discrete choice models to examine the choice criteria of customers. Unlike traditional choice analysis, which are often conducted at the product level, I focus on the IT vendor level. The selection of IT vendors involves additional considerations like brand effect or brand width, which are often not applicable to individual products. A discrete choice model using IT vendors as choice alternatives allows us to focus explicitly on these decision criteria and at the same time estimate their effect sizes. The result of this research provides empirical insights on consumers' receptions of certain brand new vendor characteristics that are now receiving wide attention from IS researchers. On the supplier side, this research helps IT vendors identify certain key aspects or attributes that characterize physical IT markets. The information is useful when they formulate corresponding production/marketing strategies.
Both studies 1 and 2 are conducted to examine the choice decisions of computer vendors. Study 1 looks specifically at larger-scale systems, while study 2 looks at personal computers. The result of study 1 shows that both brand reputation and product variety are very important for computer vendors. A firm that possesses stronger brand name or offers more computer models is more likely to be selected by customers. This result is explored further in study 2, where I show that the effect of extending brand width is strongest among those relatively "weaker" brands as compared to strong brands.
For information products, I develop a classification framework that segregates different kinds of information goods (like software, plain information or online services) according to their inherent attributes. This is an important first step towards gaining thorough understanding on the competitive considerations of information products. Based on this classification, I then apply game theory to study the competition considerations of software, which is by far the most commonly observed information product on the Internet. In study 3 I develop an analytical model that focuses on software functionality decision, which is a strategic decision solely made by software vendors but which has important cost and profit implications for both vendors and customers.
The result in study 3 shows that, in general, only the most powerful software will be developed in monopoly software markets. In a duopoly market, the decision is more complex in that no developer can guarantee itself a surplus without knowledge on competitors' actions. Therefore software developers who wish to step into a software market need to carefully project the likely action of its competitors. If the developers join the market at different time, it can happen that each of them serves a different market niche and enjoy supra-normal profit. However, in such cases the late-movers actually enjoy an advantage over the first moving developers.
Keywords: discrete choices, brand effect, product variety, information products, software functionality
Post a Comment