What Do You Do When Your Small Competitor Pulls Out Its Big Gun? A Case Study Of Telecom Market

Question:

Discuss about the The Upstart Assault Case for Meridicom and Telzip.

This fictional case presented by Marco Bertini and Nirmalaya Kumar of the London business titled “what do you do when one of your small competitors pulls out its big gun?” This case explores the question on the basis of commentaries of George tacker, of Simon Kutcher & partner and discusses how small competitors create a bad reaction on the telecom market.

This case presents a study of two telecom competitor companies, namely Meridicom and Telzip. Meridicom is known for being the largest established company of telecom which provides high production of several kinds of telecom services, whereas the Telzip is a small company runs with low marketing skills and capability. The disputes arise after a strategy is changed by the telzip company to increase a high market price just as Meridicom Company.  Telzip Company shook the market of telecom services by offering to his customers a “free broadband services” forever. Such offering of Telzip Company provokes a meridicom to take a bold action against Telzip Company. Meridicom Company decided to cut off all his prices of telecom services.

Joeseph Ulan, a chief marketing officer of Meridicom Company faces with incompatible directions to provide a discounted rate to all his customers for their products or services. But such discounted idea of concept was rejected by an officer, Joe.

The case suggests cannibalizing of the company by a decrease in sales volume, revenue, or market share of telecom products by the meridicom company (McGrath, 2013). Such cannibalizing method increases a greater evil to the outsiders or new comers in the telecom market. The case study created a revelation of nobody’s assault scenario in a market.

The overview of the case presents that the dominating company loses their grip if his customers switch to their new company. In the case study, Telzip Company does not explore its market strategies in a righteous manner as it provides harm to an interest of other small competitors. This case study sets an illustration of competitive rivalry and its changing aspects.

The case begins with advertisement published in financial times which tapered the chief offices joseph face of the Meridicom company progress in one stance. The advertisement published in Financial Times that a Telzip Company is offering free broadband services for life long to his business customers together with landline and mobile services to those present customers who have desire to change their membership from Meridicom services. Such attractive services represent an act of predicament to Meridicom Company. At the instant of the issue that whether Joe should disregard or react to Telzip’s unflinching step or not. In case, Joseph respond to such unflinching step of Telzip’s then he should put stress on an implementing a several market policies to attract his customers.

Meeting of Administrators

Meridiocom Company is a most popular telecom company, but TelZip currently a forerunner in the portable services and with the free broadband services. Telzip is able acquire a dominancy over Meridicom’s broadband and landline services. It would be vital step for Meridicom to put stress over Telzip’s services as he holds a sound and excellence position in a market and require influencing their customers (Clayton et.al. 2016).

The next step after problem arise in Meridiocom company, a meeting conducted by Joseph a chief head who gather all his administrators in one dining on the twelfth floor of their company building. The meeting presents a several opinions to the hope door or recommendation to defeat telzip’s new strategy of free broadband services and capture market again with confidence of his customers. Opinions of Adam, Emiline and Frank (division heads of meriodicom company) and Charles DeGraff (sale officer) created a scenario for Joe to take a decision mainly in two circumstances.

Firstly, Joe should respond to action against telzip’s marketing on availing free broadband services to his business customers by elucidate his various drawbacks (Philip & Kevin, 2013).

Secondly, Joe should not respond to price war against telzip’s strategy.  Such price war would create a bad vision of meridiocom company prestige and goodwill (Bryce et.al. 2011).

Adam initiated his conversation by giving relief to Joe that telzip’s free broadband strategy is not genuine and his strategy is just to fool his business customers. Moreover, Adam also suggests Joe that he does not require doing anything to improve inherent strategies of a company.

Another division head, Emeline also supported Adam’s opinion by stating that if meriodicom company would consider a strategy of small competitors that may result into a great pain for the company as it would disturb complete unit of a company.

But out of three division head, Frank puts a contradictory opinion and dissent the views of Adam and Ereline. Frank warns Joe by stating that the Telzip Company is a serious player in the market. According to frank, telzip’s strategy is a bold one and can easily beat a successful marketing of Meriodicom Company.

After meeting gets over, Joe suddenly met with his Charles Degraff, sales officer of the Meriodicom Company at a wine shop. Charles boosts Joe by saying that our company should follow fire with fire concept. If telzip can put his attractive strategy for customer then meriodicom should also focus on his customers. He asserts that meriodicom is expensive for his business customers with no availing attractive offers to be provided by a company.

Recommendations for Meridicom Company

The above opinion sets following factors:

Pros of opinion are that company has a huge market where customers would not switch to the Telzip Company without any cross check. Offcourse customers are concerned for excellence services of meriodicom.  Discount offer and free broadband services cannot fool customers so easily.

Cons of opinion were three bills provided for three services represent complicated service processes provided to customers and all three call centres may fail to seek solution to customers. Such three billing and call centres do not provide satisfactory services of themeriodicom company (Bertini, Marco and Wathieu, 2010).

Conclusion

As per above opinions, the solution to this case study deals with several recommendations for the meriodicom company against bold action of telzip’s company. There are as following

Firstly, meriodicom company is advised to monitor telzip’s service quality. Such monitoring can takes place by giving advice to Joe for responding to the price war. A purpose of price war is to bring out competitive showground by providing discount strategy, per second movement record in billing and free services of calling and internet play as foremost weapons for any competitive players. Price cut is a most effective tool to frame any effective strategy to capture market. In the context of this case analysis, meriodicom company should follow a policy of price war to attract his customer at a large scale (Coelho, 2010).

Secondly, it is recommended to Joe not to implement practical approach for responding to the Telzip Company by a tool of price attack. A purpose of price attack is to cut off the costing of a company at a very low scale (Duarte, 2012). Such price attack goals can bring consequences of loss to a company which may even create a circumstance of the company winding up due to a severe loss. In order to prevent a loss to a company, it is directed that Joe should not respond to price attack (Stalk, 2007).

As per facts of the case, the relationship between quality and price in telecom field is over prevailing to each other. In this theory of relationship, quality prevails in Meriodicom Company whereas price prevails in telzip’s case. If Joe‘s view is that quality of his company is equal or more than telzip’s company then Joe should follow the opinion of Charles, sale officer. As per Charles opinion, Joe should follow the strategy of fire with fire that is Joe should also publish an advertisement with a lengthy offer of discount published in front page of the financial times. It will attract business customers of telzip’s company.

If the quality of telzip’s company is less than meridicom company then Joe is directed to implement a strategy of fire with water. According to theory of fire with water, Joe needs to follow a modest or calm approach towards a bold strategy of telzip’s company (Luce, 2008). It might results into short term collapse in progress of meridicom company. Thus, it would also lead to provide awareness in a customer for a quality concern rather than low price charges (Stone, 2017).

In case of customer would willing to switch to telzip’s company attractive offer of free broadband then in such circumstance a meridiocom company should prepare his price war strategy (Christensen, 2013). Such action is optional when above stated recommendation may fail. It is important to preserve such price war strategy already before results of customers’ migration to another company (Wagner & Disparte, 2016).

References

Bertini, Marco  & Wathieu (2010), "How to stop customers from fixating on price", Harvard business review . pp 84-91

Bryce, D.J., Dyers, J.H., and Hatch, N.W.  2011.  "Competing against free products". Harvard Business Review, 89(6), 104-111.

Christensen C. 2013. The Innovator's Dilemma: When New Technologies Cause Great Firms to Fail. New York: Harvard Business Review Press.

 Clayton M. C, Grant A. Govindarajan V.  and. Davenport T.H. 2016. HBR's 10 must Reads 2017: The Definitive Management Ideas of the Year from Harvard Business Review (with bonus article “What Is Disruptive Innovation?”) (HBR's 10 Must Reads) Harvard Business Review Press

Coelho D. 2010. Global graphics: pricing in a new market. London Business School.

 Duarte N. 2012. HBR Guide to Persuasive Presentations. Harvard Business Press.

Luce H.R. 2008. Fortune. California: Time, Incorporated.pp.158.

McGrath R. G. 2013. The End of Competitive Advantage: How to Keep Your Strategy Moving as Fast as Your Business. Harvard Business Press.

Philip K. & Kevin K.L. 2013. Marketing Management. USA: Grada Publishing.

Stalk G. 2007. Competing Against Time: How Time-Based Competition is Reshaping Global Market. Simon and Schuster.

Stone B. 2017. The Upstarts: How Uber, Airbnb and the Killer Companies of the New Silicon Valley are changing the World. New York: Random House.

Wagner D. &  Disparte D. 2016. Global Risk Agility and Decision Making: Organizational Resilience in the Era of Man-Made Risk. Springer.