Wednesday, March 23, 2011

LightSquared Boasts "Revolutionary Business Model"

Today, there are over 311 news articles regarding LightSquared, a 4G wireless provider in the United States. LightSquared recently acquired Best Buy as a client, which has brought the company into the limelight. The company's CEO, Sanjiv Ahuha, boasts that the company will "transform the US mobile industry." Ahuha goes so far as to compare himself to (1)

Rather than buying from Verizon or Sprint, you can buy 4G service from LightSquared through retailers such as BestBuy. The company will only sell to retailers, rather than to end-users. So, while providing broadband and wireless service through a competitive, strong national network, the company will have an entirely different customer base. (2)

This week, we read a lot about business models and strategic planning. LightSquared has built its business model around a wholesale strategic concept, which is different than the conventional wireless service provider. They are differentiating themselves through their business model by creating a customer value proposition that is unlike that of the traditional carriers. (3) (4)

Read more about LightSquared:
In "Reinventing Your Business Model," authors suggest that companies should reinvent their business model when faced with shifts in competition and low-end disrupters. Do you think LightSquared will provoke this type of business model reinvention in current wireless leaders, such as Verizon and AT&T? (5)

Do you think LightSquared is all talk, but little action - would you buy wireless service from BestBuy over Verizon? Do you think the barriers to entry are too steep for a wireless company to ever acheive the success of the current industry leaders? (6)

(1) "LightSquared signs two deals, touts revolutionary business model,", 23 March 2011.
(2) Ibid.
(3) "LightSquared scores 4G deal with Best Buy," Marguerite Reardon,, 23 March 2011.
(4) "LightSquared's New Satellite Looms Large," Josh Smith,, 22 March 2011.
(5) "Reinventing Your Business Model," Mark Johnsnon, Clayton Christensen, Henning Kagermann, Harvard Business Review, December 2008.
(6) "The Five Competitive Forces That Shape Strategy, Michael E. Porter, Harvard Business Review, January 2008.

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