Finding Services and Business Models for the Next-Generation Networks

5.4 Market implications and conclusions

The world is becoming a global market. The globalisation process implies that products can be sold all over the world with the help of new technologies such as the internet, or by using partnership schemas which help a company reach all its potential customers.
However, globalisation also broadens competition. Nowadays every company in the world working in the same domain can sell its products globally, in an efficient way regardless of its geographical location.
This fact involves high risks for Western companies, since an effort in R&D to create a new product or technology can be rapidly copied by companies in emerging countries, especially in Asian countries such as India or China, where labour costs are much cheaper and the workforce is quite large. These countries specialise in adopting technologies and processes and giving them out as services to companies all over the world at a lower price than the Western companies, where those technologies originated.
Almira Labs has identified this risk from the very beginning and has centred its strategy on being a small company with high R&D skills and attempting to always be ahead of competitors in developing countries. In addition, the study of intellectual capital conducted by IADE2 reinforces these ideas and sets the basis for a valuation of Almira Labs’ intellectual capital and its market strategy, which is implemented by having a product orientation and keeping a highly innovative profile:

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  The product orientation will be the competitive differentiator in our current markets. Almira Labs is one the first few companies in the world involved in intelligent network services for NGN environments. It is a difficult market to enter, because of the very high- level skills that are needed, but – with time (two years maximum) – more competitors from all over the world will enter the market, thus bringing prices down and improving market conditions. When that happens, Almira Labs products will be ready, so we will be able to compete with new entrants by reducing the costs of our products and, therefore, becoming more competitive.
  

Keeping a highly innovative profile is a key issue to identify new markets to which Almira Labs could look for the diversification of its activities. Markets evolve very rapidly in the new global economy, especially in the sector of new technologies. When they start maturing and the risks are lower, competition increases – mainly from low-labour-cost countries – and, therefore, business profits tend to shrink in a short lapse of time. An occidental technological company like Almira Labs needs to carry out constant research in order to find the next new market or technology with the aim of maintaining its competitive advantage against such competitors.
To implement the market approach described above, Almira Labs is creating partnerships with players in the NGN area, mainly global providers or integrators with an international
presence. These partners can sell Almira Labs products all over the world using their already established commercial networks and be in charge of pre- and post-sale processes, including first-level support. This schema alleviates Almira Labs’ workload and allows us to concentrate on our core value identified in the study: intellectual capital regarding software creation.

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