Europe's leading telecom companies : Overstretched and under threat

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Europe's leading telecom companies : Overstretched and under threat

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Abstract

According to Campbell in 2002, the classic prescriptive process can be defined as a "strategy that is planned in advance and which follows a rational process through each stage from analysis to implementation."

Widely recognised as the most principal theories for strategy development, the prescriptive process must be examined within the context of an increasingly dynamic, highly competitive and global business environment as the telecom industry. However, powerful external forces are driving organisations to reduce costs, enhance processes and identify new opportunities for growth.

Many telecom companies are compelled to make dramatic improvements not only to compete and prosper but also merely to survive. This brings to the fore the importance of determining how effectively the prescriptive process can meet the needs of today's businesses when formulating strategy. Consequently, to develop their strategies, companies have to set up long-term goals and objectives that will add value to their business and cope with the uncertainty of modern environment.

Given the lower levels of market growth coupled with the grip of existing telcos on their national markets, what are the advantages and problems with adopting the classic prescriptive strategy process to develop strategies in this market?
1. What is a classic prescriptive strategy process?
2. Frameworks in relation with the prescriptive strategy process
3. Five forces model
4. Value chain analysis of the european telecom market
5. Advantages of using the prescriptive strategy process
6. Problems of using the prescriptive strategy process
Some strategists argue that it is useless to predict what will happen, given that technology is uncertain. What would be the consequences if any, of following their advice in the European telecommunications market and not make any predictions? What implications does your answer have for a prescriptive strategy process that is built on the need to make predictions?
Can smaller companies attempting to find opportunities in this market also employ the prescriptive process? Or would they be better to use a process that is more radical and innovative to structure their approach? If so, do you have any suggestions on the process that might be employed?
1. Using swot to analyse smaller companies in the european telecommunications market
2. Decision
3. Suggestions on the new process
4. Strategic group in Telecommunication field
5. Suggested strategies
6. Suitability, feasibility and flexibility matrix applied to alternative strategies

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[...] All new services and equipment offered by the companies also create added value by giving an impression of constant evolution (which has to be paid by the customer). Procurement: Dealing with terminal suppliers for the equipment that telcos will sell to their customers. Sometimes the equipment is directly made under the name of the company and furnished by the operator (e.g. Livebox made by Sagem). Reduced cost of mobile services which provides significant added value (content, multimedia offers). Licenses to distribute and use new protocols such as 3G had to be bought in order to distribute their new offers. [...]

[...] Differentiate the market The potential customers of smaller companies are from middle and lower class, so they must focus on the characteristics as follow: designing their brands and building up their reputation, developing their technology which they are good at, diversifying their characteristics of services (e.g.:- in different regions, small companies can propose different types of services based on the typical regional cultures) and setting up the commercial network For example, develop their core competitiveness to find out the specialized telecommunication technology Build up word-of-mouth, street promotion, discount flyers as promotion and give up the expensive way to save business assets for technological departments Deliberately compete against with national companies and taking advantage of news topics to be famous Get strategic alliance with different companies in similar field, for example, telecommunication companies cooperate with broadband companies. [...]

[...] This approach makes it possible to organise complex activities and exercise a greater degree of control over different business units. Overall, strategy is known well in advance of implementation, which increased pressure on existing market structures and market boundaries. Problems of using the prescriptive strategy process According to Campbell in 2002, the criticisms of using the prescriptive strategy are: “There are often major discrepancies between planned and realized strategy. Rigid planning in a dynamic and turbulent business environment can be unproductive. [...]

[...] Suggestions 2 and 5 are in the medium range; as smaller companies have enough capital to invest in new technology or ensure to make profit in alliance but not to lost companies own brand. These two suggestions are practicable with the new process. Comparing with each suggestions, the first and the third are the best ideas, and the forth suggestion is the worst choice for smaller companies' new process. Conclusion It can be concluded that size matters in the telecommunication market. [...]

[...] The combination of both prescriptive and descriptive strategy will allow the telcos to be more innovative and reactive on their environment Can smaller companies attempting to find opportunities in this market also employ the prescriptive process? Or would it be better to use a process that is more radical and innovative to structure their approach? If so, do you have any suggestions on the process that might be employed? As mentioned in the first part, using prescriptive process has both pros and cons. [...]

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