This essay analyzes the business strategies of Global Crossing, one of the companies within the Fiber Optics internet cables industry. The case identifies and describes the manner in which the corporation managed to emerge as a starter in the industry to a global leader. The analysis uses questions that dissect the strategies of the business into fine details for better understanding and interpretation. As the essay reports, Global Crossing was more creative in its approach to competition and client satisfaction, which is why it managed to survive on smaller budgets and to be more productive than its competitors did. The management of the business adopted three strategies of competitive advantage, cost leadership, differentiation, and diversification, which also enabled the company to focus on small and medium-scale consumers while its competitors stuck to the larger ones.
Q1: The Value of Global Crossing’s Services to Its clients
The case study of Global Crossing indicates that the organization adopted a different approach to marketing and selling its products to clients from that of its competitors. Having observed the rest of the companies in the industry engage in laying their fiber cables and distribute their services to clients, the management of Global Crossing identified gaps that the existing companies had left for new entrants to fill. First, the older firms had not focused on the issue of the quality of services delivered. Second, the same organizations did not recognize the value of small-scale clients. Instead, the focus of the first firms remained on the most prominent telecommunication companies in Europe and other places that they connected using their cables. The smaller consumers would only purchase their packages from the carriers, as the large corporations were termed.
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On its part, Global Crossing sought to fill these gaps by first creating quality to the clients before concentrating on the small-scale consumers. The organization managed to increase the capabilities of its cable network while maintaining the costs of the expansion and operation as low as possible. Users of the services provided by Global Crossing would enjoy data accessibility at higher speeds and better quality than that of the competitors since their cable capabilities were expanded to reach a capacity of 40Gbps compared to that of its competitors, which was lower than 30Gbps. A rise in demand for the services provided through the cable network in Europe meant that the organization had to visualize the manner in which it would capitalize on the gaps in supply metrics. The management chose to make their services available to everyone, which meant that they would sell their services in smaller packages compared to its competitors. Approaching the market using this strategy of selling was quite critical for the organization since it managed to attract many clients within a short time compared to the rest of the companies in the industry. Nevertheless, the organization strived to maintain the reputation of a ‘carrier of carriers’ through resolving to sell some of its services in larger bundles, but it did so only to the more extensive corporations in Europe, such as the most prominent telecommunications companies in the region.
In addition to making the services available to consumers in smaller packages, the company adopted a novel strategy of pricing and selling its services. The initial charges for buying the services from Global Crossing were as low as $8 million, which was incomparable to almost $18 million that the rest of the organizations charged. Global Crossing also allowed its clients to pay for the purchases in installments comprising of a deposit of 10% of the total and the rest paid once connections were made. The flexibility of pricing, the superior quality of services, and the availability of the same functions in smaller packages attracted many carriers, which enabled the institution to realize sales of up to $400 million within a shorter compared to its competitors.
Q2: Ways in Which Global Crossing Added Value to its Market
Management at the company sought to venture into three strategies that would add value to its market. The first strategy was that of cost leadership. The pioneering firms in the industry had already felt the effect of pricing since they did not find it easy to price their commodities cheaply when they had incurred significant production and management costs. Technologies that the firms had adopted in developing the fiber cables and maintaining them were too high to allow such organizations to sell their services cheaply. However, Global Crossing strived to lower the production and operational costs as low as possible using better technologies. The effect of the reduced production costs was translated into the pricing of the organization’s products to the clients. The comparison of the prices has already been made in the first question, but it is worth emphasizing that this strategy enabled the business to supply products to large, medium, and small-scale consumers.
Second, Global Crossing sought to differentiate its products from the rest of the industry. The differentiation process entailed the organization focusing on premium production while the rest of the companies produced only standard-quality services. Quality and prices were the most considered factors under this strategy. Specifically, the organization lowered its production and operational costs and translated the reduced rates to quality for the clients. The customers enjoyed faster quality services in comparison to those who resorted to competitors. This scenario meant that the products of the company stood out from the rest, which was a significant approach to differentiation. The last strategy that the corporation adopted was that of diversification. For example, while the rest of the companies focused on data alone, Global Crossing ventured into the provision of both voice and data to the clients. This approach meant that the business would soon have a more extensive market than the rest of its competition.
Q3: Approaches to Appropriating the Value-Added by Global Crossing
Global Crossing was keen to appropriate its value-addition to the market. The management of the business foresaw that the value addition practices would be useful for its growth. The most significant ambition, therefore, was to embark on the second phase of cable laying, which would expand the influence of the organization to more regions of the world. At the time of the case study, plans were underway for this second phase of the process. In addition to the desire to develop the second phase of the cable network, the organization had already expanded its operations from ocean cable networks to terrestrial systems to meet the significant rise in demand for its services that the growth in the global internet usage had occasioned. This way, Global crossing was able to meet the business and individual needs of a more substantial proportion of the population than it would have done if it had not considered shifting to its new line of activities.
Lastly, the company ‘pounced’ on the potential for growth through the construction of its backhaul, which would connect Whitesands and London and simplify the process of monitoring the terrestrial activities of the organization as opposed to the competitors who only stuck to remained in the oceanic cable system. Therefore, the business managed to track the quality of its services to clients at all times.
