Research On Collaborative Product Innovation Of Telecom Operators Based On Value Network

Convergence and transformation, are currently the hot topics of the telecom industry. The rapid advancement of information and communication technologies enables the gradual convergence of telecom industry, the Internet industry, the media industry, the entertainment industry. The simple linear value chain of telecom industry is evolving into a complex ecosystem of TIME(Telecom, Internet, Media, and Entertainment). Recently, a new round of restructuring of telecom operators has opened the prelude in China, and China telecom market is now completely open to foreign investors, and these events will make the domestic telecom market more competitive.To telecom operators, product innovation is not only the source of competitive advantages, but also an inexhaustible motive force for growth. After transforming, as integrated information service providers, telecom operators will provide subscribers with convergent telecom information products which contains goods, services and information contents. As its ingredients are complex , the innovation process of telecom information product involves a number of roles in the value network, so it's a complex and systematic collaborative project. For the reasons above, the research on collaborative product innovation of telecom operators base on value network has both theoretical significance and practical significance.This dissertation adopts theories of value network, strategic alliance and innovation as theoretical basis, employs literature review, differential games, case study and survey research as research methods, and investigates five subjects as follows: (a) analyzing the necessity and motive force for telecom operators to emphasize product innovation; (b) the definition, attributes and framework model of telecom information product; (c) value network of telecom operators taking telecom information product innovation as its core; (d) selection process of partners with maximum potential to successful collaborative product innovation; (e) key influencing factors and their action mechanism to effective collaborative product innovation.The main conclusions and innovation points of this dissertation can be summarized into following 6 aspects:1. It has built a simultaneous differential game model explaining the product innovation of telecom operators, and worked out the solution of open-loop Nash equilibrium.At present, telecom operators are at the transition and transformation phase from market oriented operation towards service-and-product oriented operation, during which continuous product innovation has become the core competitive strategy of telecom operators. In this dissertation we assume that two competing telecom operators competes through adjusting the product innovation level and resource invested in innovation efforts, and they take profit maximization as their objective function. A simultaneous differential game model is built upon the above assumptions, and its open-loop Nash equilibrium solution is given. Through discussing the open-loop Nash equilibrium, we conclude: (a) The competing telecom operators increase the rate of investment in product innovation with time; (b) In a continuous innovation context, the equilibrium strategy for the competing telecom operators is to increase revenue by increasing product innovation level at a faster rate with time.2. The definition, attributes and conceptual structure model of telecom information product is presented, referring telecom information product to be an integrated compound of telecom service, information content and commercial element.Nowadays, telecom information product is a relatively new research area, there is little common consensus on its definition and structure. In the dissertation, telecom product is defined as follows: Telecom information product is what a telecom operator offers under a brand to satisfy communication and information needs of specific segmented customers. Telecom product is based on telecom service, attaching tariff, information content/application, channel, customer service and supplementary resource. A structure framework of telecom information product is then put forth.3. The conceptual model of value network for collaborative product innovation of telecom operators is proposed, and the complexity of value network is also then defined.Roles involving in the product innovation efforts and their relationships are studied based on the concept and structure of telecom information product, and then the model of value network for collaborative product innovation is proposed, which contains five value chains: device value chain, network value chain, infrastructure value chain, application value chain, content value chain. The complexity of value network is presented according to Shannon's calculation of entropy in information theory.4. A 3-phase partner selection process is proposed based on the assessments of technological alignment, strategic alignment, and relational alignment of potential partners.In collaborative product innovation efforts, it's very important for the success of collaboration to select an appropriate partner. In the dissertation, we conducted in-depth interviews to the executives and managers from 8 companies including telecom operators, device manufacturers, content(service) providers, network equipment manufacturers, and Internet companies. Through case study and narrative analysis, the 3-stage partner selection process theory is proposed.5. 8 key influencing factors for collaborative product innovation are induced systematically, and their action mechanisms are hypothesized base on literature review. Then these hypotheses are validated using data collected through survey from companies in telecom value network.Factors influencing the success and failure of strategic alliances and new product development efforts are induced to identify the 8 key influencing factors for collaborative product innovation: trust, communication, coordination, environmental uncertainty, alliance type(competitor alliance or non-competitor alliance), innovation type(radical innovation or incremental innovation), alliance structure(power equal alliance or power unequal alliance), control mechanism. The action mechanism of these 8 factors are hypothesized. To validate these hypotheses, measurements and survey items for these factors are designed. To increase the accuracy of measurement, a pilot test was conducted, and according to the result, necessary modifications were made to the survey questionnaire. Finally, we conducted the survey to 300 companies, and 145 valid questionnaires are collected, hypotheses are validated using the survey result. The result shows that most of the hypotheses are supported.