The five partners model: France Telecom, Alcatel, and the global telecommunications industry

Abstract

This paper uses the D'Cruz/Rugman Five Partners Model 1 to show how France Telecom has effectively partnered with suppliers, customers, competitors, and the non-business infrastructure to develop France's telecommunications cluster. The Five Partners Model is a cooperation-based framework for organizing economic activity to create international competitiveness for globally oriented firms. It is compared to the more traditional competition-based framework used by multinational corporations. A contrast is drawn between Alcatel and France Telecom in their attempts to craft national, regional, and eventually, global strategies for competitiveness in telecommunications. The comparison is useful and timely due to the increasing convergence of communications' technologies, the impact this will have on the strategies of other firms, and the implications for the strategic management of large firms competing in global markets. A comparison of the competitive strategies of France Telecom and Alcatel illustrates two very different means of positioning for competitiveness in the global telecommunications industry. Moreover, the organizational structures of these companies embody fundamentally different approaches to achieving international competitiveness. France Telecom embraces a more cooperative strategy which depends upon sharing and accessing resources with partner organizations. Alcatel adheres to the more traditional structure of a multi-divisional, multinational corporation.