Iridium: Making a Comeback?*

            


Details

Case Code : CLBS048
Publication date : 2004
Subject : Business Strategy
Industry : Telecommunications
Length : 05 Pages
Price : Rs. 50

To download this case click on the button below, and select the case from the list of available cases:

» Business Strategy
Short Case Studies
» Business Strategy Case Studies**
» Case Studies Collection
» ICMR Courseware
» View Detailed Pricing Info

Key words:

Iridium, Motorola, Ray Leopold, Ken Peterson, Bary Bertiger, satellite based wireless personal communications network, Vebacom, Korea Mobile Telecommunications, Sprint Corporation, STET, Mobile Satellite Services (MSS), Globalstar, Odyssey, Chapter 11 petition, Dan Colussy


* This caselet is intended for use only in class discussions.
** More comprehensive case studies are priced at Rs.200 to Rs.700 (US $5 to US $16) per copy.

 


Abstract: ICMR India ICMR India ICMR India ICMR India RSS Feed

The caselet discusses the problems faced by Iridium after the launch of its mobile satellite services. These problems landed the company in deep financial trouble, which led Iridium to file for Chapter 11-bankruptcy protection in the US Bankruptcy Court. The case also talks about Dan Colussy’s turnaround strategies that resurrected the company and made it a success.

Issues:

 » Critical success factors in the mobile satellite services industry.
 » Strategies adopted to revive a bankrupt company.
 » The need of market research to understand the market before a product/ service launch.

Introduction

The idea of Iridium was conceived in 1987 by three engineers-Ray Leopold, Ken Peterson and Bary Bertiger-who were working for the US-based electronics major Motorola. They pioneered the concept of a satellite-based, wireless personal communications network that could be accessed from anywhere on earth.


In 1991, Motorola incorporated Iridium to develop and deploy the satellite network system. Besides Motorola, which held a 20.1% stake in the venture, some of the other major partners included Germany’s Vebacom with 10%, Korea Mobile Telecommunications-4.4%, Sprint Corporation-4.4% and Italy’s STET with-3.8% stakes respectively. Motorola was the prime contractor for supplying satellites, gateways and communication products for Iridium...

Questions for Discussion:

1. What were the reasons for Iridium’s failure during the first phase of its launch despite substantial support from banks, creditors and suppliers? Explain in detail.

2. Dan Colussy revived Iridium, which had been written off as a bankrupt company with his turnaround strategy. What was the turnaround strategy adopted by Colussy? Which elements of the strategy in your opinion, were critical to the revival of the company and why?