Strategic action and customer mobility: Antecedents and consequences of strategic actions in the Korean mobile telecommunication service industry

This paper investigates the sources and consequences of strategic actions in the Korean mobile telecommunication service industry. Based on competitive dynamics research and an organizational learning perspective, it suggests hypotheses and tests them with monthly data on service providers’ competitive and alliance actions, as well as statistics on monthly subscribers during 2002–2007. We show the positive effects of a firm’s own experience, other firms’ strategic actions, and firms’ alliance tendencies on the likelihood of firm-level competitive action and alliance. We also find that negative performance feedback accelerates the mimetic influence of rival firms’ competitive actions and that positive performance feedback strengthens the momentum effect of a firm’s own alliance experience on the likelihood of alliance. Both competitive actions and alliances appear to influence customer mobility across firms in a complex manner. Based on customer mobility data, this study finds that alliances increase market dynamism, that is, customer mobility. It also shows that competitive actions, in general, serve to effectively attract switching customers from rivals. This study partially answers questions regarding the triggers of competitive actions and alliance activities among mobile telecommunication service providers and their performance consequences.