Business models, strategyegy and internationalisation around the Telecom Crash

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Business models, strategyegy and
internationalisation around the Telecom Crash

• What is the influence of these strategic choices
  on the performance of telecom operator companies
  in the years 1998-2001
• H.Ebbers, Nyenrode University and CEIBS Shanghai

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Agenda

• Introduction
• Earlier work about KPN
• Theory/ choices
• Research methods
• Results
• Conclusions

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Introduction

• Work in progress
• Three students between May 2002 and February 2003
• Guidance of the Center for International
  Business, Nyenrode University

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Core Activities for KPN

• Mobile telecommunication
• IP and data services
• Internet, call centre and media- services
• Fixed network
• Emphasis is on the first three activities

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KPN Mobile

• Two strategically important joint ventures KPN
  Orange (1998) and BellSouth-KPN (1999)
• Acquisition of E- plus (Germany) seen as a
  growth market
• Acquisition of Orange-KPN Belgium
• Majority stakes in Central and Eastern Europe

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• Arrangements with NTT- DoCoMo
• Technology sharing
• Minority holding NTT- DoCoMo aquired a 15 stake
  in KPN
• UMTS biddings

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International expansion

• Regional focus (CEE)
• Control over management
• Divestments driven by debt problems and the 2001
  telecomcrash

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KPNs alliance network within mobile
telecommunications
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(No Transcript)
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Introduction

• Companies Telecom Operators
• SBC - KPN - France Telecom
• Deutsche Telekom - Telia - Sonera
• Vodafone - BT - ATT
• Colt - Cable Wireless - Infonet
• Sprint - MCI Worldcom - QWest

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Theory

• Business Models
• Mintzberg
• Cushway Lodge
• Viscio Pasternack
• Internationalisation
• Strategies
• Boston Consulting Group matrix
• Porters generic strategies
• Ansoffs product/market matrix
• Equity and non equity based cooperative agreements

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Business Models
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Internationalisation

• more than 90 of revenue local level 1
• less than 90 but more than 50 of revenue
  local level 2
• less than 50 of revenue local but less than 25
  of revenue
• outside its own continent level 3
• more than 25 but less than 50 of revenue
  outside its own continent level 4
• more than 50 of revenue outside its own
  continent level 5

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Strategies
BCG
Porter
Ansoff
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Research methods

• detailed company analyses
• performance
• business models
• internationalisation
• strategies

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Results Telecom Crash

• Market performance

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Results Business Models (1)
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Results Business Models (2)
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Results Internationalisation
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Results Strategies
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Results Performance
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Conclusions (1)

• Generally a limited correlation between company
  performance and business models,
  internationalisation and strategy
• Telecom Crash has little impact on business
  models, internationalisation and strategy
• Low debt/equity ratio has positive impact on
  performance both before and after the Telecom
  Crash

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Conclusions (2)

• Business Models
• Lack of significant correlation
• Customer oriented (Cushway Lodge)
• High Viscio Pasternack Score
• Internationalisation
• Little correlation in 1998, no correlation in
  other years
• Strategy
• Porter correlation changes before after crash
• BCG stars are performing well
• Ansoff move towards penetration after crash