Product bundling in global ocean transportation

There are over 20 'components' in an international door-to-door transportation, ranging from warehousing and distribution, to forwarding, documentation, transportation, customs clearance, etc..As tariffs in ocean transportation tend to converge due to competition and service homogenization, carriers, in competition with third party logistics service providers, strive to integrate door-to-door services under their control. In doing so, and among others, they invest heavily in logistics rather than ships that can nowadays be easily chartered in from institutional investors.Integration efforts however have been met with varying degrees of success in the face of skeptical and suspicious shippers requiring cost break down and more transparency. With the use of game theory, this paper attempts to develop winning service bundling strategies for ocean carriers, i.e. global supply chain solutions under all-in prices. Preliminary results show that, under certain conditions, bundling can be an equilibrium strategy for one or more carriers, and despite leveraging around captive liner services and potentially enhanced profits, bundling does not necessarily lead to a loss in social welfare.bundling;integrated logistics;liner shipping;vertical integration

Regulatory unbundling in telecommunications

Due to its dynamic nature, and the increasing importance of competitive sub-parts, the telecommunications sector provides particularly interesting insights for studying regulatory unbundling. Based on the theory of monopolistic bottle-necks the fallacies of overregulation by undue unbundling obligations are indicated. Neither the promotion of infrastructure competition by mandatory un-bundling of competitive subparts of telecommunications infrastructure, nor regulatory induced network fragmentation within monopolistic bottleneck com-ponents is justified. The impact of the shrinking of the areas of network specific market power on the remaining unbundling regulation is analyzed. Finally, the phasing-out potentials of unbundling regulation in European telecommunica-tions markets are pointed out. --

Product bundling and advertising strategy for a duopoly supply chain: A power-balance perspective

The paper studies product bundling in a duopoly supply chain network under the influence of different power-balance structures, bundling decisions and advertising efforts on total supply chain profit. Mathematical models comprising two manufacturers and a single retailer are developed to capture the impact of bundling policy and advertisement strategy under three power-balance structures, namely Manufacturer Stackelberg, Retailer Stackelberg and Vertical Nash. Following game theory models and numerical examples, the study found that the total profit of the supply chain is undifferentiated under the manufacturer Stackelberg and Vertical Nash case in the manufacturer bundling and retailer bundling strategies. However, total supply chain profit under manufacturer bundling strongly dominates under retailer bundling in Retailer Stackelberg and Vertical Nash, and remains valid under multiple settings of market size, price elasticity and advertising elasticity. It is also found that manufacturer bundling is significantly affected by advertising effort compared to retailer bundling. The study contributes to the literature interfacing supply chain and marketing by studying bundling policy and advertising strategy simultaneously for homogenous products, under various power-balance structures and price competitio

Bundling, Differentiation, Alliances and Mergers: Convergence Strategies in U.S. Communication Markets

Convergence is a multi-facetted phenomenon affecting the technological basis of information and communication industries, the boundaries of existing and new markets, and the organization of service providers. Convergence in substitutes will tend to increase the intensity of competition but convergence in complements may have the opposite effect. Given the economics of advanced communication industries, convergence necessitates strategies to overcome the risk of commodification at the level of networks, applications, and services. The paper examines bundling, differentiation, alliances, and merger strategies adopted by North American service providers in response to convergence. Service providers'opportunities and risks in the emerging environment differ considerably, with cable and telephone service providers presently in stronger positions than wireless service providers, broadcasters, and satellite service providers. New entrants such as Vonage, Skype, Google, and Yahoo have high disruptive potential but remain disadvantaged without their own access networks.convergence; bundling; differentiation; alliances; mergers

Designing Scalable Business Models

Digital business models are often designed for rapid growth, and some relatively young companies have indeed achieved global scale. However despite the visibility and importance of this phenomenon, analysis of scale and scalability remains underdeveloped in management literature. When it is addressed, analysis of this phenomenon is often over-influenced by arguments about economies of scale in production and distribution. To redress this omission, this paper draws on economic, organization and technology management literature to provide a detailed examination of the sources of scaling in digital businesses. We propose three mechanisms by which digital business models attempt to gain scale: engaging both non- paying users and paying customers; organizing customer engagement to allow self- customization; and orchestrating networked value chains, such as platforms or multi-sided business models. Scaling conditions are discussed, and propositions developed and illustrated with examples of big data entrepreneurial firms

Interactive bundle pricing strategy for online pharmacies

Online retail pharmacies usually price their products differently from traditional drugstores. Based on real-time consumer behaviors, this paper proposes a dynamic bundle pricing strategy to maximize the pharmacy's profit. Given free shipping thresholds and consumer budgets, we propose a mixed-integer nonlinear programming model and a heuristic to sequentially price customized bundles. We further conduct a numerical study using the data from a leading e-pharmacy in China. Our computational results indicate that the proposed model not only improves the e-pharmacy's profit by attracting more customers but noticeably contributes to consumer surplus. Through sensitivity analysis, our model is proved to be robust under various scenarios.</p

An economic analysis of software piracy in a competitive cloud computing market: A product bundling perspective

In the cloud computing era, incumbent vendors are offering both on-premises software and cloud-based software service. Simultaneously, they are facing competition from new entries who just offer cloud-based software. However, piracy exists in on-premises software for incumbent vendors. Therefore, incumbent vendors are facing pressure from piracy and new entries at the same time. Using the framework of product bundling, this study builds a stylized analytical model to investigate the optimal product bundling strategies for software vendors in the presence of software piracy. The research found that the pure bundling strategy is the best choice for existing software vendors in the market in most cases because of the more flexible bundling price. Pure component strategy can be more profitable than pure bundling strategy when piracy costs are at the medium level