Upstart's Assault Essay

Meridicom is faced with a serious blow from a small competitor, Telzip, which poses a serious threat to its market position and pricing power.

Face-to-face with this crisis, Meridicom now is faced with a choice whether it would fall head-on to this temptation at joining the price war or to use this threat as an opportunity to overcome its weaknesses and emerge as an industry leader.

Joseph Ulan, Chief Marketing Officer, Meridicom, is in a critical situation following Telzip’s move of providing free broadband services. His CEO Gerald Segner expects Joseph to get his division heads to work together while fighting competition and also building the brand. However, a discussion with his division heads makes it clear to Joseph that the division heads are uncomfortable with any changes because they are operating quasi-independently, being remunerated based on their divisions’ performance. He is also aware that his customers do not find their services very convenient owing to their decentralized nature. He also understands that they are expecting quality services at lower and predictable prices than those being offered now. He also gathers that they are market leaders in broadband and landline services but have a minimal share in mobile phone market where Telzip is a formidable competitor.

Meridicom is under a serious threat considering that the broadband connections lost would also mean losing the revenues from landline connections and further the valuable data that is available to Meridicom owing to their connection from the local exchange to the individual customer, which is critical in planning their future customer and marketing initiatives. It also gives Meridicom 70% of its revenues.

Under these circumstances, Meridicom can benefit from the fact that any business customer thinking about migrating to Telzip for its free broadband services would have to move to their landline services also. However, in the present situation where Meridicom holds an 85%...