Telenor Group: Developing a New Business Model
(5 pages of text)
In January 2019, the telecommunications industry was under severe threat of disruption. Telecommunications companies (telcos), which had historically been able to cope with technological disruption by moving from first-generation through to fifth-generation cellular network technologies, were now threatened by digital service providers (DSPs)—firms that came with a new business model that threatened the telcos’ existing business models. Telcos were being forced to deliver only network connectivity, whereas DSPs had positioned themselves to deliver the more lucrative digital services directly to customers. The Norwegian telco Telenor Group (Telenor) decided to take up this battle by offering digital services to end-customers. However, doing so raised several important questions: Was full confrontation with large DSPs inevitable, or was there another way? How could Telenor switch from the old to the new business model? Was it possible to manage two conflicting business models under the same company?
The case covers a number of issues related to the ways a telco can reinvent its business model amidst new and growing competition. Specifically, the case can be used in an undergraduate- or graduate-level course on change management, generic strategies, disruption, or business models. After working through the case and assignment questions, students will be able to do the following:
- Discuss different challenges and opportunities of managing radical change in established companies.
- Analyze different generic strategies and their trade-offs and complementarities.
- Explain how firms can approach external disruption and innovation.
- Compare different business models companies can adopt when presented with volatile industry environments.
Information, Media & Telecommunications
Norway, Large, 2019
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