A study on the convergence matrix

Abstract

Convergence driven by digital technology is not only a phenomenon within the boundaries of some specific sectors, but rather a strategic objective that need to be approached by possibly all the industrial sectors. In this study, a new concept of the convergence matrix is introduced that can be used by the telecom operators in consideration of convergence strategies, by combining input-output analysis with the portfolio matrix. It is an analytic framework based on the fact that the telecom operators`` selection strategies of services from various industries are much similar to the multibusiness firms`` portfolio selection strategies, and on the fact that the convergence trend is closely related to the correlation of telecom and other sectors in input-output transactions. The convergence matrix has two axes ; the competitiveness of the industry is on the vertical line and the competitive position of the industry on the horizontal line. That is, on the vertical axis are placed the growth rates of the production inducement coefficients of forward and backward linkages between communications and each industry compared to prior period, while of the horizontal axis are placed the averages of power of dispersion and degree of sensitivity. The strategic meaning of each quadrant in the matrix is also described here based on the two existing frameworks . And as a case study, the recent business lines or services provided by SK Telecom, the dominant wireless operator in South Korea, are overviewed and depicted thereon, to identify their strategic implications.