While T-Mobile has historically focused on value conscious families and individuals for their revenue, they have just launched a massive plan to acquire a large share of an unfamiliar market - businesses. The No. 4 U.S. carrier plans to acquire some $3 billion in new sales from the business sector over the next three years. While their current B2B share is relatively small to its competitors (4%, compared to Verizon's 41%, AT&T's 35% and Sprint's 14%), it hopes to take a large portion of that in the upcoming years.
Executives blame T-Mobile's weak past U.S. performance with underfunding and poor sales efforts. They are confident that with increased funding and a more aggressive effort they can see a turnaround. To take away market share from their competitors, they either have to differentiate their service or be prepared to battle it out on the price field. Executives agree that they'll do the latter.
When considering Porter's Five Forces (barriers to entry, substitution threats, buyer power, supplier power, and rivalry among competitors), it seems as though they may need a little more to compete than just slightly lower prices. In an industry with extremely intense rivalries, high buyer power, and great threats to substitution, maybe T-Mobile should think about doing something different. Perhaps they should find a unique value-add, eliminating some of the threat of substitutions. Or incentivize businesses in a unique way to undercut their buying leverage. Whatever it ends up being, they're playing a risky game. They need to realize that they are vying for a position in a market in which they have essentially no current share, and their competitors are equipped as well, if not better, for the price war.
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