Cover image for Growth Dynamics in New Markets

Growth Dynamics in New Markets

Author Stefan N. Groesser , Martin F. G. Schaffernicht
Release Date: 2018/07/01
ISBN: 9781119118237
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Book Description

An innovative simulation-based approach for strategic decision making when launching new products

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. 

Table of Contents

  1. Cover
  2. PREFACE
    1. Invitation to explore
    2. What will you learn?
    3. What are the components of the book?
    4. What is the structure of the book?
    5. Who is the book for and how to use it?
    6. Before you start
    7. References
  3. ACKNOWLEDGMENTS
  4. ABOUT THE COMPANION WEBSITE
  5. INTRODUCING A DURABLE PRODUCT IN A NEW MARKET
    1. 1.1 Introduction
    2. 1.2 Your briefing for the business challenge in Plutonia
    3. 1.3 Managing NewTel’s new business in the simplest scenario: business as usual
    4. 1.4 A competitive scenario: compete for customers
    5. 1.5 Outcomes of both scenarios in terms of key performance indicators
    6. 1.6 Chapter summary
    7. 1.7 Questions and challenges
    8. References
  6. CAPTURING CUSTOMER DYNAMICS DRIVEN BY DIFFUSION
    1. 2.1 Introduction
    2. 2.2 Diffusion: a regular dynamic in social systems
    3. 2.3 Structure and dynamics of new product diffusion
    4. 2.4 Chapter summary
    5. 2.5 Questions and challenges
    6. References
  7. EFFECTS OF A LIMITED PRODUCT LIFE CYCLE DURATION
    1. 3.1 Introduction
    2. 3.2 The concept of life cycle duration and its effects on customer dynamics
    3. 3.3 Tracking Accumulated purchases and Accumulated customer‐months
    4. 3.4 Chapter summary
    5. 3.5 Questions and challenges
  8. THE EFFECT OF ADVERTISING SPENDING
    1. 4.1 Introduction
    2. 4.2 Turning the attention of Potential customers to a product
    3. 4.3 The effect of fixed advertising spending
    4. 4.4 The effect of constant advertising spending with a limited life cycle duration
    5. 4.5 The effect of advertising for one month
    6. 4.6 How many Current customers are won by winning one new customer?
    7. 4.7 Chapter summary
    8. 4.8 Questions and challenges
    9. References
  9. FINANCIAL RESOURCES
    1. 5.1 Introduction
    2. 5.2 The structure of revenues
    3. 5.3 The structure of costs
    4. 5.4 Behaviour: customer dynamics and the accumulation of profits
    5. 5.5 Chapter summary
    6. 5.6 Questions and challenges
    7. References
  10. ANALYSING THE MARKET SITUATION WITH THE SIMULATION
    1. 6.1 Introduction
    2. 6.2 Planning the search for the highest possible Accumulated profits
    3. 6.3 Searching for optimal values for the decision variables
    4. 6.4 Decisions, behaviours, and outcomes in the best case monopoly
    5. 6.5 Setting your objectives
    6. 6.6 Chapter summary
    7. 6.7 Questions and challenges
    8. References
  11. MARKET DYNAMICS WITH A COMPETITOR
    1. 7.1 Introduction
    2. 7.2 Competing for Potential customers: rivalry type I
    3. 7.3 Competing for Current customers: rivalry type II
    4. 7.4 Competing for Potential and Current customers
    5. 7.5 Reflecting on rivalry
    6. 7.6 Chapter summary
    7. 7.7 Epilogue: your debriefing
    8. 7.8 Questions and challenges
    9. References
  12. RELAXING ASSUMPTIONS AND ADDING RELEVANT ASPECTS OF REALITY
    1. 8.1 Introduction
    2. 8.2 The population is not constant
    3. 8.3 There are not only Potential customers and Current customers
    4. 8.4 Current Customers care about Quality
    5. 8.5 Advertising influences word‐of‐mouth and Customers switching
    6. 8.6 Mobile phones are not contracts are not customers
    7. 8.7 More frequent decisions and a longer time horizon
    8. 8.8 Contracts do not change retrospectively
    9. 8.9 The number of competitors is higher and varies
    10. 8.10 Nonlinear relationships replace causal structure
    11. 8.11 The harmonic development of demand and supply capacity: a new book
    12. 8.12 Chapter summary
    13. References
  13. SYSTEM DYNAMICS
    1. 9.1 Introduction
    2. 9.2 Your mental model of growth from diffusion
    3. 9.3 System dynamics modelling
    4. 9.4 System dynamics competence
    5. 9.5 Learning and applying system dynamics
    6. References
  14. ABBREVIATIONS
  15. INDEX OF PRINCIPLES
  16. INDEX OF GUIDELINES
  17. INDEX OF MANAGEMENT INSIGHTS
  18. INDEX OF SYSTEMS INSIGHTS
  19. INDEX OF TOOLBOXES
  20. INDEX OF DIYS
  21. INDEX
  22. End User License Agreement
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