A thesis submitted in partial fulfillment of the requirements for the degree of Master of Engineering of the Asian Institute of Technology, Bangkok, Thailand

Thesis (M.Eng.) - Asian Institute of Technology,1976

The primary aim of this research is to understand the behavior of the technological substitution process. The factors which affect the substitution process are broadly classified into three groups considering from the point of view of the producer, user and market. A system dynamics model is developed considering the causal relationships of the above mentioned factors. Sensitivity analysis is done to see the behavior of the substitution process under varying factor conditions. The significance of different factors affecting substitution phenomenon are evaluated. On the basis of the study, it has been found that only profitability has profound impact; advertising effort, quality, price ratio has some impact in the growth phase of the product life cycle only and market growth, investment size, time and experience has negligible impact on the substitution process. Lastly, the substitution forecast made by the comprehensive model is compared with the generalized model and it is concluded that models using market share data alone is sufficient for forecasting technological substitution, because market share takes care of all diversified factors affecting substitution process.