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Strategies for a discontinuous future.





Consulting & advisory, research notes, in the press, about bubblegen,
next wednesdays.





Saturday, October 18, 2003
 


How are the telcos responding to number portability? By using massive price competition embedded in long-term contracts to raise switching costs and generate lock-in. This is bad strategy for four reasons.

First, because it's so predictable. Second, because it denies exactly the value proposition consumers want telcos to create - low switching costs through number portability. Third, because tactics like this reduce the incentives for firms to engage in strategic innovation - trying to lock customers in means the market can't tell you what kind of revolution it wants, so you can never create it in the first place. Fourth, it opens you up to disruption - because you're too busy trying to maintain lock-in.

How do firms become 'evil'? By not addressing technological discontinuities or shifting consumer needs, and letting their strategies decay. Here we have a prime example.

-- umair // 11:40 PM //


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