Strategic renewal in the European telecommunications Industry

technological innovation have dramatically changed the European telecommunications industry. To cope with these forces, incumbent telecommunication operators had to strategically renew their companies. What can be learned from these incumbents and which managerial challenges are ahead? To address these questions, we investigated trajectories of strategic renewal of Europe’s five largest incumbent operators and the impact on financial performance for the period 1992–2001. Remarkably, we did not find significant differences between the renewal trajectories of these incumbents. These findings suggest herd behaviour, indicating a preference for adopting similar organizational templates due to institutional forces resulting in a common ‘follow the industry’ renewal trajectory. In the years to come, however, we expect such herd behaviour will not be viable anymore. On the contrary, top management should make firm-specific strategic choices. The analysis and findings discussed in this paper provide insights for top management of incumbent firms in other deregulating European industries as well, such as the financial services and energy industries.

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