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Essay / Iridium Discussion - 1210
Competitive Attribute Program ¡V Iridium Mobile Satellite System ProjectThe ability to capture values throughout the technology adoption lifecycle not only determines the success of a business, but also whether it will create a competitive advantage through technology. Companies with significant fixed costs, capital-intensive business plans and specialized asset bases will face the challenge of maintaining strategic continuity, as it is generally prohibitive to change direction to respond to any structural change imaginable. Iridium, a mobile satellite system that cost $5 billion to build, began providing commercial telephone service on November 1, 1998. This article aims to use the Iridium project, which I previously participated in at Motorola, to illustrate the additional benefits and pitfalls of creating competitive advantage through technology and activity system. .Discussion of Additional Benefits and Industry Analysis Using a Five Forces ModelCompeting Mobile Satellite Systems (MSS) CompaniesThe largest competitor to MSS companies is Globalstar. Globalstar's communications system is supported by low-cost satellites which increase the opportunity for Globalstar to implement a comparatively lower pricing strategy than Iridium. Although Globalstar has simpler and cheaper satellites than Iridium's, it requires ground switching systems for efficient connections. In exchange, the Globalstar system's coverage was limited to land locations. This form of benchmarking activities within Iridium helps formulate the strategic position and better strengthen strategic fit. Substitutes ¡V Ground-based wireless servicesIn the 1990s, ground-based wireless telephone service expanded rapidly around the world. The adoption of a single standard, known as GSM, in Europe and parts of Asia has been a key factor in the growth of wireless phones. There were 480 million cellular subscribers worldwide in January 2000 and this figure reached more than billions by 2005. The resulting economy of scale will make it possible to assess the extent of competitive pressure in the business environment. This helps incentivize Iridium to consider in advance the price-performance trade-offs offered by substitutes and the need for product differentiation alternatives. Customers/Buyers ¡V Global Business TravelersThe primary customer is the business person willing to travel around the world as well as stay in touch with office and home. Considering industries that operate in remote areas, Iridium's competitive positioning option tends to be access-based to reach differently accessible customers with similar communication needs. Iridium designed a set of activities to compromise on competition, such as reducing marketing campaigns in urban areas and brand development for large companies..