Analysis of the BCPC Internet Strategy team

In our ABP class, we analyzed the above mentioned case study. Below is a summary of my analysis:

Understand the context

Big City Phone company (BCPC) offers local, long distance, and wireless(cellular) telephone services to its subscribers and is focused on providing quality customer service to its customers. The company intends to take advantage of the new High-speed internet-access(HIP) technology and launch the product across all regions. HIP is a modem technology that uses existing telephone lines as a three-channel data delivery system to transmit data requiring high bandwidth data to subscriber personal computers. Hence, phone and data services were available along-side each other. BCPC has completed a successful 3-month market test of 25 customers in a particular region only.

Problem identification

The Internet strategy team lead- Chris Berkowitz and his team are aware BCPC has to enter the HIP market. However, the challenges accompanying the successful launch and sustainability of the HIP service have alerted the team to examine the key issues that will influence their stance on the launch of HIP in the big city and also how to channel BCPC’s strengths in relation to the HIP product offering.

Decision Options

1. Staff and launch HIP as a high-speed internet access service across its entire service region.
2.  Concentrate on providing HIP as a wholesaler and learn from the mistakes of retail providers of

the service.

Analysis

BCPC is positioned to benefit from both decision alternatives; whether they decide to launch full-scale service or to provide wholesale services to third party providers. The extent to which each option is successful depends on the BCPC’s competitive advantage and how it can be used to capture the opportunities the HIP service presents, and limit the extent of damages that the weaknesses and threats pose to the launch.

Increasing Demand for HIP Service and BCPC Existing Market Base

The HIP service is increasingly becoming popular amongst consumers because it is seemingly 6times faster than traditional analog systems and only $10 costlier. Hence, it is an attractive market to enter into based on demand forecasts. BCPC is a major player in the USD40 billion wireless market and recently made a successful entry into the USD106 billion long distance market. With its existing customer base, BCPC is positioned to capture adequate market share if it chooses to launch on a wide scale to across all regions. However, there are technical risks that accompany the launch of the service, a failure to make a successful launch can mar the entire brand identity of optimum customer satisfaction.

Technical Expertise and Complicated End to End Integration

Due to the technicality of the HIP service installation process and the expertise required to enhance the end-to-end integration of customers’ devices, BCPC will have to make adequate provision for training its staff since it is an entirely different service from the existing service offerings. Although, the cost of training wasn’t highlighted in the case, it is a major concern that might pose a profitability threat. Similarly, BCPC technicians have to master the entire integration process so as not to reflect wrongly on the company’s existing customer satisfaction identity.

Mandatory Regulatory Requirement to Offer Wholesale Service

BCPC is required to offer/sell their networks available at cost to third party providers (incumbent competitors). This means BCPC is mandatorily required to be a wholesaler provider of HIP service but they may or may not offer the services to customers as a service provider themselves. This means decision 2 of the decision options is unavoidable for BCPC. Embarking on Decision 2 only is guaranteeing a loss of new market share in the HIP market. However, it might be the better option in order to maintain its existing principle of providing high-quality service and ensuring outstanding customer satisfaction.

Limited and Inadequate Product Testing Coverage

As highlighted in the case, BCPC carried out a successful Testing on 25 customers in a particular region. This is an insufficient number compared to the 10million customers the company intends to service after launch. The sample size for the population is not adequate, hence, conclusions made from the study is null and not deemed as a key pointer in making decision pertaining to the launch in the Big City. On normal estimates, BCPC has to carry out comprehensive testing to cover all regions in order to avoid shocks and due to the fact that some customer locations might require more sophisticated technical expertise than others. Hence, findings from a broader study range will be valid and enhance the wide-scale launch of the HIP service.

Customer Satisfaction

BCPC ‘s strategy is a Differentiation Strategy focused on providing superior customer service in the telecommunications market, striving for “very good’ and “outstanding” ratings, and to continually exceed customers’ expectations. This is the bedrock of BCPC’s success and why customers choose to be associated with the brand. If BCPC decides to launch the HIP service at the customer level without adequate preparations, it is bound to jeopardize the company’s existing brand identity- if customers are not optimally satisfied. Negative feedback from the HIP service can also affect customers’ faith in BCPC’s other service offerings, thereby posing a threat to the entire BCPC’s business.

Decision Recommendation

Concentrate on providing HIP as a wholesaler and learn from the mistakes of retail providers of the service.

Suggested Additional Alternatives

Suggested alternatives for Chris Berkowitz and the internet strategy team are:

1. Launch HIP service in a few regions and draw inferences from the performance before making a wide-scale launch in order not to lose market share.
2. Carry out a wider testing exercise before launching the HIP service.