FLEXIBLE ENTRY STRATEGIES FOR EMERGING TELECOM MARKETS

The existing technical literature on the telecommunications industry a ddresses, on both operational and cost dimensions, the relative advant ages of different telecommunications technologies. Significant complem entary research also exists in the area of entry strategies for develo ping markets or those without a competitive history. We believe that t hese two literature bases can combine to form a theory of ''flexible e ntry,'' in which a firm's telecom technology decisions support entry o f potentially high-growth but also high-risk markers, such as those as sociated with rapidly developing economies. Specifically, we suggest t he definition of a systematic framework to balance technological choic e and market conditions-two choices to be undertaken concurrently, und er conditions of future uncertainty, for a firm contemplating entry. W e suggest the use of efficient frontier analysis, trading off flexibil ity and commitment, for this purpose. Flexibility in this sense repres ents the ability to redeploy assets to alternate purposes without loss . Commitment, rather than the opposite of flexibility, denotes the abi lity of a firm to resist bring ''forced out'' of a favorable market. W hile flexibility preserves capital in the event of poor demand realiza tions, commitment is essential to continued profitability in the event of favorable demand realizations. Suggestions for future expansion of this framework are proposed. (C) 1998 Elsevier Science Inc.