TECHNOLOGY CONVERGENCE AND GENERIC STRATEGIES IN TELECOMMUNICATIONS COMPANIES

Abstract

The boundaries between organizations, markets and industries that used to be clearly set in the past are being radically changed as a result of the technological convergence. The objective of this paper is to understand the influence of technological convergence in the creation of competitive advantages and the adoption of generic strategies by telecommunication companies. Here we consider the technological convergence (networks, services and terminals) and the corporate convergence, using Michael Porter’s model to analyze the industry and the competition. Government’s influence is considered by means of the five force model and not as a force on its own. The methodology involved a descriptive qualitative approach based on a multiple case study. A semi-structured interview was carried out with the directors of nine telecommunication companies in Minas Gerais that provide convergence packages including voice, data and video services. The results of the study show that the technological convergence is clearly influencing the choice for differentiation as the competitive strategy, regardless of the organization playing in the broad market (differentiation strategy) or in a narrow market (niche differentiation strategy).