Mobile value chain collaboration for product diffusion: Role of the lifecycle

Abstract

To succeed in a competitive market, mobile value chains (MVC) must respond to dynamic demand timely. To offer effective collaboration mechanisms in MVC for mobile service diffusion over the lifecycle, we propose a three-stage integrated simulation model: (i) a system dynamics model to depict mobile service diffusion which drives the evolution of MVC; (ii) a cooperative game model to examine the profit allocation between mobile operators and providers; (iii) an evolution game model to explore the collaboration in the mobile alliance of providers. Then we design an agent-based system to replicate the evolution process of MVC under various settings, and further validate it by comparison with a real-world case. We find that an MVC would need different strategies at different lifecycle stages. Advertising and the connection degree of mobile operators contribute significantly to MVC performance at the growth stage. In contrast, word-of-mouth (WOM) and the penalty is more effective at the mature stage; penalty can extend the mature stage. Finally, we find the scale and the components ratio of a mobile alliance positively affect MVC throughout its lifecycle and decline stage, respectively. Thus, management should select fitting mechanisms over the lifecycle to improve its performance.