Page 225 - Performance Leadership
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214 • Part IV Implementing the Performance Leadership Framework
Many telecom companies are so-called mobile virtual network opera-
tors (MVNOs). They do not have their own mobile infrastructure; they
buy excess capacity at large quantities at a discount from other telecom
companies that do own the infrastructure. Because these MVNOs have
minimal overhead, they can sell this capacity to their clients at lower prices
than the original telecom company can and still make a profit. The advan-
tage for traditional telecom operators is that they can sell their overca-
pacity. The same can be seen in other infrastructure-related businesses
that are usually highly regulated. To enhance competition, infrastructure
and distribution are split. The national railways are split into an infra-
structure and multiple operator companies. The electricity companies are
split into an infrastructure organization and a sales company, and multi-
ple vendors of electricity can deliver through the same infrastructure.
Increasingly, innovation comes from the collaboration of different
companies. For example, Senseo is a coffee pod system, codesigned by
Philips and Douwe Egberts. Philips contributed the hardware, a special
coffee-making machine, while Douwe Egberts developed the supplies,
coffee pods filled with coffee according to a special brewing method. As
another example there is the Nike system; a collaboration between
Apple and Nike. Nike designed shoes that hold a sensor that, through
a bluetooth connection, sends jogging statistics to an Apple iPod, so
users can track their average speed, distance covered, time spent jog-
ging, and an approximation of the calories burned. Such initiatives can
be shaped traditionally through a joint venture, but that is not needed.
Production and marketing teams of multiple companies can simply
work together and develop new products and services. An agreement
simply specifies how to allocate the costs, the revenues, and the profit.
Financial services have also become networked. For instance, there
are many alternatives to straightforward mortgages. Usually they come
with a package of insurance, supplied by the insurance unit of a finan-
cial services conglomerate or a business partner, such as homeowner
insurance and life insurance. The insurance company invests money
and reinsures the risks it takes. Furthermore, the mortgage itself con-
tains investment components. The payments on the mortgage are rein-
vested, enabling the homeowner to pay off the house faster—and at a
higher risk obviously—while making use of all tax benefits. Some of
the mutual funds in which the mortgage is invested may not even