The Upstart’s Assault

www.hbr.org

HBR CASE STUDY

Should Joe ignore or

respond to TelZip’s

bold move?

The Upstart’s Assault

by Marco Bertini and Nirmalya Kumar

•

Reprint R1007X

What do you do when one of your small competitors pulls out its big

gun?

HBR CASE STUDY

The Upstart’s Assault

COPYRIGHT © 2010 HARVARD BUSINESS SCHOOL PUBLISHING CORPORATION. ALL RIGHTS RESERVED.

by Marco Bertini and Nirmalya Kumar

Joseph Ulan spent his first few minutes in the

office on Wednesday Googling the weather in

Sardinia. He, Ana, and the boys were set to fly

there on Saturday, and although he wasn’t

looking forward to the Alitalia flight, the prospect of two weeks on the beach seemed heavenly. No questions from his CEO about why the

new customer initiatives were behind schedule. No excuses from the landline, mobile, and

broadband division heads about why their respective service centers and billing systems

couldn’t be integrated. No meetings to run, no

presentations to prepare. He couldn’t wait to

step out of his chief marketing officer suit and

into his Daddy sandals and swim trunks.

Only 72 more hours, Joe thought, smiling as

he opened that morning’s Financial Times. But

the ad spanning page 3 made his lips narrow.

“Free broadband forever with TelZip! Save at

least €450 a year when you switch from Meridicom!”

TelZip, a small mobile-network operator

eager to break into new markets, had decided

to offer free broadband service to business customers who were willing to leave their current

provider and enter into a long-term contract. As

the oldest and largest telecommunications

player in the country, Meridicom was accustomed to seeing both old and new competitors—bigger mobile companies, cable TV operators, and internet providers—undercut its

prices on all types of services by the usual 10%.

Meridicom was the industry price leader, so

when it published rates, everyone else reacted

predictably. But TelZip was now changing the

game—not only giving...