Attacker's advantages in a homogeneous market: The case of GSM

Dodo zu Knyphausen-Aufsess, Christian Krys, Lars Schweizer

Abstract


This article deals with the market entry and competitive strategies of two third entrants into the Western European GSM market: The Greek mobile communications operator Cosmote and the German operator E-Plus. Starting point of our research is the analysis of the entire Western European GSM market, which shows a broad variance in performance indicators of the operators although the market characteristics regarding the product, the supply and the demand side are quite homogeneous. In order to explain the performance variance and the success of late movers we examine the market entry and competitive strategy of the most successful third entrant in Western Europe, Cosmote, and contrast this case to E-Plus. The market environment and the company characteristics of both companies are similar, but their performance differs significantly. The major results of our analysis are (1) that quality of service, including particularly the network coverage at launch and in the first stage, is more important than time to market, (2) that the image of an operator depends strongly from the customer's perception in the starting phase, and (3) that the commitment in combination with the resources of the shareholders are crucial for the operators' success.

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