Iridium Case Essay

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IRIDIUM CASE 1) Strategic Vision Iridium’s strategic vision is to become a superior global communications network who could overcome the limitations of cellular networks such as physical obstacles or geographical barriers through innovation and extensive research & development projects. They wanted to become the ultimate, sophisticated, high-technology communication system that people would turn to. Leaders of Motorola felt they had a responsibility to support projects by committing a significant amount of resources to new, potentially lucrative ideas. 2) Why did Iridium Fail? Who is responsible? Cellular market build-up greatly reduced people’s need for Iridium’s service. Management did not properly account for the company’s revenue model. Iridium phones were too large and expensive, forcing the company to charge higher prices and compete in areas where cellular was unavailable. They could not compete with cellular service providers. Through the launch of its service, Iridium focused on marketing its products and services to business travellers who often flew overseas to remote areas and islands where cellular reception is unavailable. In the end, cellular service was available. The huge majority of the population lives in urban areas where cellular transmission towers have been built. Their target market’s needs have been met by cellular phones much cheaper and more convenient to carry around, providing greater value to them. Iridium also had no competitive advantages. They cannot charge lower prices because their fixed costs are too high. The Iridium service was also far from perfect. Since Iridium’s technology depended on the line-of-sight between the mobile phone and their satellites, customers often reported dropped calls and poor reception inside buildings, cars, and in many urban areas. Iridium also did not have enough data

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