Product Differentiation Strategies and Impact of Factors Influencing the Differentiation Process : A Case study of the Mobile Telecom Service Industry of Pakistan

Abstract: Telecommunication has evolved tremendously from its origin to the present. Competition has grown in the telecommunications industry. One of the idiosyncratic characteristics of the mobile telecom services industry is the offering of homogenous products/services to the whole market, which indicates services being undifferentiated. The purpose of this paper is to study the differentiation strategies of mobile telecom operators and the impact of factors influencing the process of differentiation. The study will concentrate on the differentiation strategies of the mobile telecom service firms operating in Pakistan. The analysis model of this research was developed based on the determinants of product differentiation, relating to the tools that managers at mobile telecom service companies employ to execute differentiation strategies, and the factors influencing them. The empirical part of this study was conducted in January 2017. The multiple case study approach was adopted as a study method, and four case studies of the mobile telecom service companies operating in Pakistan were compared through cross-case analysis. Qualitative methods of data collection were employed and through semi-structured interviews primary data was gathered and secondary data was extracted from the websites and annual reports. The findings from the four case studies revealed that all the mobile operators opt for the differentiation strategies based on the determinants. It was examined from this research that these determinants are interrelated with each other. It was evident from the study of all the case companies that regulations affect the industry profits, increase the cost of upgrading the networks and infrastructures, causing a delay in the adoption of innovation, thereby influencing the differentiation strategy. The second factor influencing the differentiation process revealed in this study was competitive imitation, which caused convergence of strategies resulting in undifferentiated services even though operators tried to differentiate their services. The competitive imitation becomes easier due to the oligopoly structure of the mobile telecom industry.