Price Competition in a High-Tech Industry for the Period of Process Portfolio Enlargement

Abstract

One of the main tasks that high-tech companies management face is to determine the values of functional product characteristics that would allow a company to maximaze its profit. The problem of coordination between R&D programs target parameters and high-tech companies strategic financial goals is discussed within the frame of industrial organization, particularly, its part which conserns markets for vertically differentiated products. This article deals with ecomomic-mathematical model of price competition for a vertically differentiated duopoly featured by the entry of a product which quality is much better than that of another.