On competitive relationship networks: A new method for industrial competition analysis

Other than co-operation, competition is a central issue in industry and commerce today, which always exists among enterprises that provide homogeneous products or services. The competitive relationships of enterprises determine the rivalry nature of dominant interactions among them; that is, rivalry actions are the main interactions while co-operation actions generally occur on an occasional basis and do not essentially change this competitive nature of their relationships. This paper reports a detailed study of a competitive relationship network of 578 certified Independent Software Vendors (ISVs) in Guangzhou city, China, which shows some prominent scale-free (SF) structural properties and complex dynamical behaviors. In this report, the economic background and the significance the competitive relationship network model will be described; the underlying dynamical mechanism of the network model will be analyzed, showing some advantages of the new model for industrial organization theory (IO) over the traditional ones. Finally, some related issues, such as the static properties of the competitive relationship network and some of its graph properties, will be discussed. © 2007 Elsevier B.V. All rights reserved.