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Europe's leading telecom companies : Overstretched and under threat

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  1. 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
  2. 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?
  3. 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

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.

[...] 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. [...]

[...] Therefore, telcos have to find equilibrium between leading the market and being led by the technologies. Dynamic capabilities, based on effective internal processes that give ?ability to bring improvements to market quickly?, (Johnson, Scholes and Whittington p. 484) are of importance as they allow the telcos to chase technological developments. For a prescriptive strategy process, this would mean that all strategies can be adopted as nothing is planned in advance. This would require the company to be very reactive and flexible, which is not possible in a market demanding such high investments in technology. [...]

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