System Dynamics Approach For Enhancing Core Competence Of The Lcd Industry

LCD (Liquid Crystal Display) became one of the key components in the digital devices. LCD's dominant position in all the segments of the FPD market already replaced CRT (Cathode Ray Tube), thereby indicating a future prosperity of LCD. These days, however, many experts predict that LCD will confront great challenges from new display technologies like OLED (Organic Light Emitting Diodes), three-dimension display, and flexible display. To survive in these circumstances, one needs to investigate and analyze the LCD industry to develop proper strategic options. In this paper, we first present the value chain model of the LCD industry in order to gain insight into the industry dynamics. Second, based on the analysis result at the first stage, we determine key variables that affect LCD market share and sales volume in the context of the present structure of LCD industry structure. We also check out if the behavior of the key variables in the model well track the real movement in the LCD industry. Finally, we discover strategic alternatives in terms of LCD manufacturer's operational capabilities. In particular, we employ the system dynamics method built upon the causal loop diagram of the LCD industry. Our research is expected to help the LCD panel manufacturers to rationalize their decision making.