Value creation from the enterprise market – how partnering creates a win-win
Know your strengths, know your limitations. Learning and recognising the things you can’t do is a key step towards taking action to creating new value. Partnerships provide a simple but effective means to help MNOs target niche or specialist markets that they may not otherwise be able to do. In order to create value from, for example, micro and SoHo businesses, MNOs should consider how they can partner with providers that understand their needs, increasing value for all.
It’s a well-repeated truism that knowing your strengths is essential for any business. Business analysts invest considerable time in performing variations on the theme of SWOT. However, it’s not always recognised that knowing your limitations is just as important.
For a long time, many mobile operators have failed to learn this lesson. However, we think there are clear signs that this is changing. It’s of profound importance. For example, many operators have ambitions to address certain market segments or niches, but are unable to successfully realise these ambitions. As a result, there are significant market opportunities that are inadequately or poorly addressed.
In this context, the role of the MVNO is of growing importance. If an MNO has the vision to recognise its limitations, instead of a lacklustre attempt to rectify the situation, or simply ignoring it altogether, it can partner with relevant companies that can better understand niches and more effectively deliver appropriate and relevant solutions.
This is a hard lesson. At the MVNOs’ World Congress, we heard KPN candidly admitting that business markets in particular are hard to address. While large enterprise needs capture their attention, the many different needs of smaller businesses are harder to identify. Worse, there are very specific needs that may demand a variety of approaches.
KPN’s solution to this, having understood its own limitations, is to enable partners to use its network to offer innovative, compelling services that are targeted towards the needs of different business users. In this way, markets that are underserved can be targeted by providers that have the right focus, while helping stimulate overall market growth. All parties benefit – KPN sees increased traffic and consumption; the partners build attractive businesses; and end-user customers benefit from access to services that were previously denied to them.
Many will know that some MNOs have launched second brands to target specific consumer segments. We’ve also seen the same thing in business markets – the MNO recognises that it cannot really address SMEs or micro businesses and, instead of ignoring them, launches a specialist second brand to do so. Dipper is an outstanding example of this approach.
As a result, instead of competitive erosion, value creation can be achieved. This value creation is essential to the future of all providers – MNOs, MVNOs and the like. It’s a clear need from within the industry, to avoid the race to the bottom of lowest prices and lowest common denominator. If you want to create value instead of destroying it, knowing your limitations is an essential step. Armed with that knowledge, MNOs can find ways to enable partners to launch services that address the needs of customers they cannot themselves reach.
Given that in most markets, SMEs are typically poorly catered for by MNOs, it’s an effective way to grow core business. We have helped many MNOs and MVNOs achieve this. If you want to find out how to create value, talk to us.