The high competition rate in the industry necessitates fast and numerous new developments. Nextel Communications Inc. can much more valuable spend its time and money by investing in new ideas. Court cases take time and energy, while also being highly detrimental to the creative process. In this way, losses are incurred not only in terms of legal fees and work hours, but also in terms of creativity and new products within the company.
In addition, law suits could have a detrimental effect on a company's reputation. If Nextel were for example to lose the case, Verizon receives the right to continue with their product. Potentially, Nextel's reputation could be harmed by its involvement in an apparently petty attempt to corner the market on their product. Even if the company wins, the result could be equally damaging in terms of lost hours as well as creativity and reputation damages.
Furthermore, the company's existing competitive edge is significant enough to help the company...
Walkie-talkie is a single new service. The company has survived increasing competition since the 1980s. It is difficult to imagine that Nextel would be unable to respond to a similar new product from a rival company via further innovations attached to the walkie-talkie service.
Rather than wasting resources on court action, both Nextel and Verizon would do much better to concentrate on their research and development departments. While the wireless market is more or less saturated, there are certain areas that can still be valuable to companies such as Nextel. Untapped markets for example include the rural areas of the country. In addition, more innovative and practical products at lower prices will increase revenue from existing and loyal customers. This is also an area where companies such as Nextel should concentrate their financial and creative energies, as customers are the future of the industry.
