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Title: The battle for critical mass in the UK mobile communications industry
Other Titles: Strategy : analysis and practice : text and cases
Authors: Sammut-Bonnici, Tanya
McGee, John
Wensley, Robin
Keywords: Service industries -- United Kingdom
Cell phone services industry -- United Kingdom
Cell phone services industry -- Law and legislation
Competition, Unfair -- United Kingdom
Issue Date: 2005
Publisher: McGraw-Hill
Citation: Sammut-Bonnici, T., McGee, J., & Wensley, R. (2005). The battle for critical mass in the UK mobile communications industry. In J. McGee, H. Thomas & D. Wilson (Eds.), Strategy : analysis and practice : text and cases (pp. C290-C309). Maidenhead: McGraw-Hill.
Abstract: This case outlines the growth of the UK mobile communications industry from its inception, and provides an overview of the events that transformed mobile telephony into a mass market commodity. Beginning in 1985, the case outlines the continuous evolution of T-Mobile, Orange, Vodafone and O2i, the mobile network operators (MNOs) which were licensed to operate in the UK from 1985 to date. The case describes how Orange and TMobile rapidly gained market share over O2 and Vodafone, the industries incumbents that had set up ten years earlier. The case tracks the network operator’s initiatives into the mid 1990s as the market changed radically in terms of affordability, product choice, and customer cohorts. Finally the case describes strategic action in the late 1990s when the MNOs experienced exponential demand and the market hit critical mass. The case focuses on the strong forces affecting the companies: rapid technological developments and the exponential rise in sales fuelled by the mechanism of network externalities. Besides describing the sales patterns of the mobile communications market, the case documents the jockeying for the leadership position, and the constant narrowing of the differences in market shares. The companies experienced powerful market forces which override strategic action and permit new entrants to rapidly gain ground. As a result the MNOs opted for copycat strategies in order to collectively benefit from network externalities, and to reduce the risk of allowing competitors to gain ground. When used with the support readings on the mechanism of network externalities, the case becomes a powerful vehicle for studying a variety of new market issues including strategic herding and strategic collaboration.
Description: Includes a teaching note prepared to accompany the case ‘The Battle for Critical Mass in the UK Mobile Communications Industry’
Appears in Collections:Scholarly Works - FacEMAMar

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