Diversification Strategies British Mobile Telecommunication Companies - Research Proposal Example

Research Proposal (Overview - Diversification Strategies British Mobile Telecommunication Companies) Executive Summary The telecommunication scene is one of the fastest growing sectors today. Rapid advancements in IT and the convergence technologies have provided the all important trigger for this industry to gain newer heights. Today mobile telephony techniques have made it possible for the customers to receive a range of services on one small instrument. Besides being a voice and data mobile telecommunications services gadget, the mobile instrument serves as, a computing device, a radio and TV receiver, storage for music, video streaming, live chat, internet access device etc. The technology is a big craze with the youth segment in particular. Mobile telecommunication companies have also been providing Wireless fidelity or Wi-Fi communication. The service oriented industries in particular are the one's reaping maximum benefit out of this technique. Therefore, there's lot of scope for the telecom companies to diversify in different markets, different customer segments, different technologies etc. Introduction During the study we intend to analyse the diversification strategies being adopted by different British companies in different markets/ segments. Mobile telephony is still appears to be in the evolutionary stage; with rapid advancements in technology more dimensions are being added. For example live TV broadcasts are the latest additions. With stiff competition and shrinking margins in the domestic market, companies are looking eastward to mark their presence in vast markets like China and India. Therefore, this is the most appropriate subject for study at the moment. Preliminary Literature Review Liberalization and globalization has opened newer vistas of trade and business all around the globe. Opening up of economies has now tilted the balance in favor of market forces. Globalisation of production and investment in recent years has led to a situation where long-term capital inflows from advanced economies to developing economies is taking place at a rapid pace. While taking a decision of diversification into a new area, market or segment, instead of the traditional approach of 'maximizing' the profits, organizations go ahead with multiple objectives, monetary as well as non-monetary. There are short-term objectives as well as long-term ones. Strategists are supposed to prioritize all such objectives, so that there is clarity and ease of decision making in situations where there is an apparent clash of objectives. The mobile telecom field in itself is a technology intensive area; with newer trends in technology making the older one's outdated at a faster pace. Therefore, it is a challenging task for the companies to remain relevant in the market, outdo the competitor and continue to profitably cater to the needs of the existing customer. Companies devise strategies accordingly. Diversification is an important element of such strategies. While including vertical integration in diversification, Cantwell et al (2004) define diversification as an extension of company's portfolio of products or businesses into new product or business areas. As far as mobile telecom field is concerned, British telecom scene is dotted with the formidable presence of companies like, British Telcom (BT), Orange, Vodafone, and Hutchison etc. Orange has mobile operations in 13 countries while Vodafone operates in 27 countries (Datamonitor, 2007). Though BT has divested its mobile phone business by divesting its mobile business in 2001, but mobile telecom field doesn't just involve mobile phones only, it includes a range of mobile computing solutions. For example, recently BT launched the 'BT Managed Mobility' simplify the management of corporate mobile assets, including mobile phones, BlackBerry devices, PDAs, pagers, aircards and other wireless assets in addition to cutting costs1. Similarly Vodafone has big plans for Turkey and India, where the company sees lot of scope. Quoting a recent study by Mobile Entertainment Forum and Ovum Zoller (2007) suggests that belying the industry's expectations, just about 20% of UK mobile subscribers actually search for content with the mobile internet. This provides another area for the British telecom industry for diversifying into mobile internet and tapping the huge market. Before taking a final decision on diversification, a company is supposed to study and anlyse all the relevant factors. This can be done with the help of Marketing Information System (MIS). Such a support system gathers information about market, changes in market dynamics, response to some of the recently launched products and information about the strategies of its competitor/s and new entrants in the market. Smith et al (1968) defined the marketing information system as; "A structured, interacting complex information systems of persons, machines, and procedures designed to generate an orderly flow of pertinent information, collected from both intra- and extra-firm sources, for use as the basis for decision making in specified responsibility areas of marketing management." Wi-Fi and WiMax are other less explored areas in the mobile computing solutions business. Garside (2007) reports about setting up of the stage for a showdown between Europe's biggest telecoms groups and the Internet search engines giants Google and Yahoo. Big European companies like Vodafone, France Telecom, Telefonica, Deutsche Telekom, Hutchison Whampoa, Telecom Italia etc have planned to come together to create a mobile phone search engine that could challenge Yahoo! and Google, the US giants. An innovative technology called Qix can enable rapid discovery of contacts, features, services, and other content on mobile handsets. That's another interesting area for the British telecom companies for diversifying their businesses. The UK is already at the centre of the plans of chip firms and broadcasters bringing mobile TV services to market (Electronics Weekly, 2006). Harris, a technology company, has also announced its plans for a new in-band mobile TV delivery format that are to be made available for Mobile phones, PDAs and other mobile devices by 2008 (Broadcast Engineering, 2007). Therefore the mobile TV market appears to have lot of promise for the man on the move, an important field for the mobile companies to have strategic tie-up with broadcasting companies. Research Question(s) or Hypothesis Mobile telecom industry in Britain is going through a rapid advancement phase. Implementing diversification strategies forms not only a part of diversifying the business activities but also a means of leveraging the economies of scale. In this study paper we plan to find out answers to the following; How prepared are the Mobile Telecom companies in Britain to accept the challenge of Technology transformation, a crucial element for diversification Which are the common diversification strategies that telecom companies in general and British telecom companies in particular have adopted Research Design In order to analyse the industry, the research will be designed in such a manner that we get the inputs from industry, users as well as the literary world. 1. Since Mobile telephony is a technology intensive area, with changes in technology taking place at a fast pace, therefore an effort would be made to study the recent advancements. Such a study can be carried out by studying the technology journals, telecommunication journals/ magazines and some reliable websites. 2. An effort would also be made to sift through similar studies carried out in the past by researchers and some of the available books on the subject. 3. Some recent strategies of the British telecom companies with their consequences and reasons for success/ failure will also be studied during the research. 4. Interview/ Questionnaires would also form an important part of gathering input and data from some mobile users and important functionaries of the telecom companies. 5. Some of the service industries like, tourism and hospitality make extensive use of WiFi and WiMax technologies. An effort will also be made to solicit their views regarding their experience with mobile technologies and their expectations from the telecom companies in future. 6. Of course, current news available on TV, Radio and the newspaper will form an important component of remaining in touch with the latest. Research Paradigm Since mobile telephony is a vast field with large number of users, and huge amount of data, therefore we'll be using the Positivistic paradigm during the course of the study. In fact, there are equally large numbers of companies in the telecom field worldwide; therefore it may not be possible to look around for most of such companies. Therefore we'll limit our study to major players within Britain. Research Methodology We'll study the historic growth of telecom field in Britain. How Privatisation and liberalisation has affected the telecom industry in its journey Analyse the functioning and strategies of major telecom companies in Britain. Carry out a comprehensive literature review Gather data with the help of Interviews/ Questionnaires with the help of clearly stated, unambiguous, and realistic questions. Put together all the elements and analyse the data. Limitation Telecommunication is a vast field with changes taking place at regular intervals. Therefore in order to come out with a relevant study paper, efforts should be to adhere to the timeline, but due to limited resources at our disposal this might prove to be a challenging task. It might prove to be an arduous task to interview the functionaries of telecom companies. The higher level officials might not be able to spare the time while lower levels executives might not be able to provide more strategic information. With the limitation of resources, it may not be possible to encompass all the events taking place in the telecom industry, we'll therefore try to make it as comprehensive as possible. References: 1. BT (2007). BT Managed Mobility solution helps enterprises control costs of mobile assets (25 Apr 2007). Available online at http://www.btplc.com/News/Articles/ShowArticle.cfmArticleID=82a871c2-9a33-48a1-898e-9119834eaa2a (Accessed Apr 25, 2007). 2. Broadcast Engineering (2007). 'Harris proposes new in-band mobile TV format'. Mar 6, 2007. available online at http://broadcastengineering.com/RF/harris-new-mobile-tv-format-0306/ (Accessed Apr 25, 2007) 3. Cantwell, John; Gambardella, Alfonso and Granstrand, Ove (2004). The Economics and Management of Technological Diversification. Routledge. NY. 4. Datamonitor (2007), Vodafone Group Plc: Company Profile, Datamonitor Europe, London. 5. Electronics Weekly (2006). UK becomes tech test bed for mobile TV. 12/13/2006, Issue 2269. 6. Garside, Juliette (2007). Mobile giants plot secret rival to Google. Sunday Telegraph. 05/02/2007. available online at http://www.telegraph.co.uk/money/main.jhtmlxml=/money/2007/02/04/cnsearch04.xml (Accessed Apr 25, 2007) 7. Smith, Samuel V, Richard H. Brien and James E. Stafford, eds., (1968) 'Readings in Marketing Information Systems'. Boston: Houghton Mifflin Company. 8. Zoller, Eden (2007). "20% of UK Subscribers Search Internet Via Mobile Phones". http://www.3g.co.uk/PR/Feb2007/4267.htm (Accessed Apr, 25, 2007) Read More