Incumbent firms vs. new entrants within the telecom industry

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In the contemporary competitive environment incumbent firms have to face the challenge of meeting new competitive actions from the internal threat of existing firms as well as external threat of new entrants. Incumbent firms can create barriers to entry, whereas new entrants have to face different barriers to entry. Competitive actions can be responded with aggressive reactions, as well as non-aggressive reactions depending in the industry and market. The purpose of this thesis has been to gain a deeper understanding of how incumbent firms versus new entrants compare in a competitive environment. To reach this purpose a qualitative embedded single-case study of an incumbent firm within the telecommunications industry has been made. Three competitors to the incumbent firm, i.e. new entrants within that specific market, were chosen as subunits. Data have been gathered through an interview with an employee of the incumbent firm as well as through archival records, documentations and online- and offline data. In this study, it is shown that an incumbent firm is more focused on securing its position on the market, whereas a new entrant tends to use a more aggressive approach in order to gain market shares. The conditions are different for an incumbent firm in comparison to a new entrant since it has more financial resources, well established networks and customer base as well as organizational advantages. On the other hand, new entra...