A diffusion model of the multi-generations products competition by system dynamics analyzing

Abstract

Based on the system dynamics analyzing and considering the competition environment sufficiently, this study constructs an integrated multi-generation diffusion model based on system dynamics, which considers dynamic market potential with a competitive relationship among generations and products. In addition, this study investigates how the price could be included as an explanatory variable. To verify the proposed model, an empirical study on telecommunication products. The finding reveal that given insufficient historical data related to product spread, the model has a perfect fitness, and the parameter estimate results tell a good story about the whole picture of telecommunication products spread. The model has done better than other models in terms of forecasts precision. Accordingly, we can conclude that the multi-generation product diffusion model is effective.