Leading International Markets
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Leading International Markets Change (1834-1937) was the pioneer of radio phone exchanges, but this was more that strategic decisions would provide created a wholly owned £1.86 billion INTRODUCTION and a Nobel Prize winner in 1909. It technology-led rather than reflecting a clear direction for GEC’s communi- telecommunications equipment company. The modern business environment was in the same year that he founded changing consumer requirements. cation business. Acquisitions were subsequently made contains many different influences that Marconi SpA, an innovator in civil, to add products from US companies, as In recent years, fewer industries have been faced with The strength of GPT depended on sales make decision-making more complex mobile radio and military telecommu- Acquisition is one way of responding well as US market share. For example, more challenges than the telecom equipment industry. of System X narrowband digital than ever, such as technological nications in Italy and over 60 countries to transformational change and the the Reltec Corporation was acquired in exchanges, primarily to BT. At the Though the industry has been around for more than one change, competitive rivalry and for many years. GPT (GEC Plessey opportunities it creates. This is more 1999 to access new technology and time, sales were effective and provided hundred years, it has changed more in the past few years global communications. The ability Telecoms) had more than 90 years responsive than internal development enable Marconi to expand into cheap connections for voice telecom- to make sense of these influences is experience in the field of telecoms as as it allows organisations to improve the US market. FORE systems was than in the entire preceding century! By examining how it munications, which ran at low speed the speed by which they enter new also acquired for its leading edge has adapted to this accelerated process of change, this particularly important for managers - the UK’s largest telecoms manufacturer. and were technologically linked to the on the one hand they signal opportunities, product and market areas. It also broadband switching capability and to case study illustrates how Marconi Communications Marconi Communications is a busi- System X exchanges. Though well on the other they warn of threats. provides an opportunity to share exper- give the company a position in the ness-to-business company, selling in suited for voice services, they were not has developed leading-edge products that have enabled Organisations that recognise the tise and knowledge. enterprise and campus markets. All of industrial markets to large telecom- capable of providing the infrastructure complexity of these forces progress, this took place against a backdrop of an it to position itself as world leader in key areas of the munication services and corporate for the type of modern data-rich com- Much of the critical products and survive and prosper, while those that industry experiencing a revolution. telecommunications market. clients. The process of change has munication services many organisa- technology were developed when GPT fail to deal with change fall rapidly activated the business to develop from tions and individuals have become was jointly owned by GEC (60 per cent) behind. Recent periods of industrial The expanding marketplace being a provider of telecoms equipment, dependent upon today. and Siemens (40 per cent). The total history are littered with the skeletons ownership of technology was to become to an organisation that helps its The privatisation of BT and deregula- In recent years there has been a rapid of companies that have failed to inno- critical for an organisation determined customers to communicate by providing tion of the telecoms sector, including growth in telecommunication services vate and adapt to change. to revitalise its future and develop new them with world-class solutions. that of other national telecom compa- such as call waiting, call identification, markets and products. As a result, GEC Some industries go through ‘trans- nies across the world, increased conference calls and voice mail. A bought the 40 per cent shareholding in forming eras’. Businesses are faced A time of change competition at a crucial time. Rapidly larger development has been in the GPT that was owned by Siemens, and with progressing beyond their existing developing new broadband technolo- world of data rather than voice. In the became sole shareholder. At the same operations rapidly, through a process of Until 1984, the primary telecom gies and the emergence of competing past, these were considered to be niche time a merger took place with Marconi radical change. By accepting the chal- operator within the UK was British cellular networks, would soon be able markets, with few mass market SpA, the Italian subsidiary of GEC, to lenges presented by their business Telecom (BT). BT was based in the to provide services to suit the new data opportunities. The development of the create Marconi Communications. environment during these periods of public sector. Successive governments dependent business environment. It Internet has, however, provided the change and strengthening their capacity managed the business because it was signalled the need for change. Within a short period of time, through most significant increase in demand for to innovate and develop quickly, suc- felt that the market could not always this decisive set of actions, GEC had services since telecom services were cessful organisations capitalise on change meet social needs. Just as one operator Making a strategic decision dominated the country, two equipment to become more competitive. Data Growth Source: Datamonitor suppliers dominated the market. They Strategy involves making major deci- Pb/month combined in 1987, under GEC, as GEC 6000 Marconi Communications sions about the long-term direction of Internet Plessey Telecoms (GPT). Also at this a business. It results from a process of 5000 time Siemens became co-owner of Although Marconi Communications is corporate planning. Deregulation was GPT, purchasing a 40 per cent stake in 4000 a GEC company and one of GEC’s changing the telecoms landscape in the the company from GEC. three core businesses, it is a new name US and the UK and signs indicated that 3000 on the telecoms scene with a powerful This period was characterised by limited when changes reached the rest of 2000 pedigree. The formation of Marconi consumer choice and a one-price ser- Europe, the pace would quicken. At a 1000 Communications united GPT and vice. BT was gearing up for a major time when transformational change Voice Marconi SpA. Guglielmo Marconi investment programme in digital tele- was required for GPT, it was important 0 1997 1998 1999 2000 2001 2002 first introduced. E-mail traffic has Narrowband technologies could only with being a market-sensitive organisa- The largest part of the developing form a key element of the fibre-optic already overtaken voice on the world’s cater for limited growth in communica- tion, capable of providing business transmissions market is the supply of backbone of Ericsson’s networks. It networks and is developing rapidly. tion traffic. Broadband data switching solutions for each of its customers Synchronous Digital Hierarchy (SDH) will also provide Ericsson with access to Marconi’s development capability Other applications are also evolving, was the only way telecommunications through a process of world wide ser- equipment. SDH equipment is a broad- band solution that has the power to so it can support the further develop- such as video telephony, video on companies could respond to this new vice support, which will eventually EXERCISES increase network capacity and flexibil- ment of SDH technology. demand and home-working. and fast-changing environment. include the management of network ity greatly, while at the same time operator’s infrastructure. As telecommunication services have streamlining management and cutting Conclusion 1 Who owns Marconi 7 Explain why it was important expanded, so have customer needs. Core competencies The new role for Marconi costs. Designed for the 21st century, Communications? for Marconi to build on its Users of communication technologies Communications is to: the system is able to meet the expand- The process of transformation has seen core competencies when Entering this marketplace would put What is an industrial market? demand reliability and want fast down- understand the challenges of its ing needs of electronic commerce, Marconi Communications reposition 2 facing direct competition Marconi Communications head-to- customers How does this differ from a load speed that provides them with a video-conferencing and a wide range itself away from narrowband switching, from well-established head with stiff competition from large, of multimedia applications, such as consumer market? range of efficiently run services. propose solutions which help cus- to become the world’s leading supplier telecommunication well established names such as Alcatel, tomers meet their challenges interactive television and on-line of broadband transmission equipment. What is privatisation? equipment companies. The US led Internet growth. Two fea- Lucent Technologies, Siemens, Nortel deliver what is promised entertainment. 3 In responding to this role, the business Describe briefly how it changed tures assisted its growth. Firstly, PC and Fujitsu. Core competencies are Describe how and why help customers use its networks to has accessed different market segments the telecoms market in the UK. 8 penetration amongst consumers was separate activities that provide compet- create value. Marconi Communications and broadened its customer base. The itive advantage and are usually diffi- Customer base Describe what is meant by one has been successful in high and this was aided by cheap new liberalised world of telecoms 4 equipment. Secondly, local calls cult for competitors to imitate. of the following: responding to the changing Transmission technology Investment by Marconi in SDH in has enabled Marconi to enter and Marconi’s competencies are: • voice mail telecommunications market.