Shaw's competitive strategy against Skype in the VOIP market

Shaw v. Skype

Shaw vs. Skype: Overview of Marketing Problems

Currently, Shaw Communications services offer a diverse range of communications options to its customers, from cable television, to Internet services. Its diversity of services as a company is its strength, as well as the long-established quality of its communications services for television and the Internet. Shaw is also a specifically Canadian-based company, specifically addressing the communications needs of Canadian consumers. However, the provider Skype has a tremendous advantage in the telephony market at present as a competitor of Shaw.

First is the fact that Shaw is the industry's first mover in the VOIP market. With a new and developing technology of great potential desirability in today's net-addicted age, Shaw has already garnered eleven million users internationally, and its international base means that its word of mouth has spread in a positive fashion all over the globe. Also, quite often with new technology, individuals are unwilling to change their service provider unless the new technical provider can offer great cost advantages to the customer. Since Skype is free, Shaw cannot offer such a competitive market advantage in terms of pricing. Also, Skype's international focus and positioning means that it has a broader array of consumers to draw from, as opposed to Shaw's regional focus.

If Shaw decides to enter the VOIP market it must find a way to overcome Skype's first mover advantage. It could do this in terms of market placement in the sense that it can offer VOIP as a part of a bundle of other Internet services to its current Canadian clientele. This would certainly be an incentive to Shaw's current Canadian Internet users, but might not draw new users from a broader, international base. However, Shaw can also offer security of its longstanding reputation in other communications services.