Conclusion

It becomes clear that telecoms are not helping themselves by trying to match Google’s approach to innovation. Google’s “Dominate or Commoditize” is a powerful strategy for differentiation in near-commoditized markets, but only if there is little regulation. As a result, telecoms will find it nearly impossible to either dominate or commoditize most of their own value chain elements, and it makes clear how important it is for Google to lobby regulators and policy makers to keep Google’s value chain un-regulated, while keeping their competitors’ value chains regulated. It is even more difficult for telecoms to achieve a competitive advantage when working on their own, as most telecoms don’t yet have ubiquitous global service access such as a web-based service company like Google does.

The lesson learned here is that being first within a value chain segment does not automatically translate into the ability to dominate or “level the playing field”. New providers might out-innovate telecoms due to their expertise in Web-based service creation, more agile organizational setup to adapt to market changes, or cultural advantages. New providers may also be able to provide better targeted customer relationship management with more attractive or targeted brand positioning and lower costs of sales and support. Telecoms would have to possess the inherent ability to realign their organizational and cultural factors to the new entrants’ user base, their operational model, and their brand. It is the ability to create an environment which targets and rewards people to drive decreased margins, to embrace competition, to open aspects of their intellectual property to 3^rd parties to create mutually beneficial outcomes while out-competing threatening new entrants. In a sense, the key to success is to move towards a “co-opetition” model, using competition to create a much larger overall market, and one in which the services provided by a telecom remain centrally positioned alongside those of competitors due to its size or buying power.

A telecom has a clear core competency of their own in working with vendors and partners. In fact, the ability to source services from multiple 3^rd parties, to control costs with sophisticated procurement negotiation, and to integrate and scale complex partner solutions, are all strengths that have been developed over many years, projects, and technologies. Often though, telecoms providers take these assets for granted, failing to recognize their importance in supporting their positioning strategies.  By implementing a significant strategic and cultural change – to realize the value of such “old school” competencies –will allow telecoms to optimize their positioning within the market. And it will allow them to ultimately compete with players such as Google, and without the necessity to copy their innovation approach.