Paper Topic:

Analysis of Failed Business in TELECOMMUNICATION

INTRODUCTION

For any business to survive in an industry , it must be viable and add value . This value must be economically viable such that it is greater than the cost of production . this means that at this point the business is making profits but who gets this surplus depends on the structure of an industry and dynamics of competition in that industry . For a company to earn a marginal profit within than industry , there are competitive forces that are considered to affect this company

for proper analysis of failed business in telecommunications

, let us analyze World com of USA . This company failed because of many reasons within its industry . To begin with , competition was one of the reasons why it failed . WorldCom was in an industry which was very attractive hence there were many forces of competition which affected it . In the industry there were many substitute available which influenced customers ability to accept and pay a premium price for the products . The customers also considered the cost of available substitutes and their prices and they easily switched off from using the world com products as result it failed . for example the introduction of mobile modem in the industry made it easier for customers to acquire and own phones at a considerate price and cost and they were convenient . competition from other existing companies also reduced drastically the marginal profits of world com making it to fail . this happened because customers were sensitive as to different prices from the same...

4 pages

35.0 KB

Free sing-up