Strategy Paper for Overcoming DTAG Market and Technology Advantage

This paper was created for a venture capital company and subsequently used to target cable accessible markets in Germany. The paper has been parsed in this forum to separately cover Digital TV, Broadband Data, Video on Demand, Telephony, Interactive TV, Gaming and Colocation.

BROADBAND DATA

Broadband Data, otherwise known as ISP, is currently dominated by DSL offered by DTAG. Substantial penetration and marketing hurdles are inherent in offering this service. Another consideration is that this service is offered "across the board" by DTAG, i.e. to residential and business consumers.

We suggest pursuing Broadband Data consumers because of the competitive nature of the enterprise, and the constraints inherent in DTAG's position. DTAG's upside – Customer recognition, excellent DSL operations reputation, tie-in capabilities for telephone, mobile phones, etc. DTAG's downside – Size i.e. DTAG cannot make quick decisions or quickly respond to challenges, governmental constraints, high overhead, slow installation, price. DTAG's downsides make them a very vulnerable target, while their upsides can be overcome by establishing a great reputation by performance, offering Broadband Data as a package within the group of products the enterprise offers, and partnering with stellar companies which offer Broadband Data services as their core competency.

The consumer ISP portion of this enterprise should be outsourced. Sourcing partners should be done by establishing x considerations.

1. Market reputation – Rather than taking the time to establish a reputation for excellence, quality and service, it would be much more economical to use existing companies which have already established brand recognition. This offsets DTAG's advantage in this area.

2. Quality of Service – Working with a company with a stellar "Quality of Service" lowers the probability of alienating potential customers, garnering adverse publicity, lowers the cost of doing business through the low percentage of rework and high percentage of successful implementation.

3. Scalability of Infrastructure – The company the enterprise partners with will need to be able to transparently (to the consumer and the enterprise) add millions of customers while offering an excellent experience. This will take an infrastructure design built to scale well when additional resources, forecasted and unforeseen, are needed.

4. Staying power – The companies selected must be financially sound and able to operate under increased workloads throughout the period of our contract. Having to convert customers from one ISP to another is guaranteed to adversely affect the reputation of the enterprise even though the enterprise is not operating the ISP. The ISP and the enterprise are considered one and the same in the customers eyes. In addition to this, the enterprise would face a financial hit, in some scenarios quite extreme. Sourcing financially sound companies has no downside.

Page 1 of 2 :: First | Last :: Prev | 1 2 | Next