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