As President of the young French wireless company Webraska, Jean-Michel Durocher, had reason to be pleasedhis company had received a high level of interest and commitment from investors during its last round of financing. In an increasingly tight capital market, having raised 52 million euros was quite an achievement.
But as he drove through Paris one evening, Durocher was preoccupied. Webraska had failed to meet its spring 2001 projections. He thought this was partly because the telecom industry had recently taken a sudden dive, but it also hinged on the telecoms shift from buying hosted solutions to acquiring core software. In Webraskas case, this meant that they no longer wanted the companys location-based services (such as telematics and navigation) but just the technology behind them.
Durocher wondered, was this a lasting trend or would the demand for hosted turnkey services recover? In the massively uncertain state of the market, what should Webraska do?
After reviewing the state of the wireless economy in Europe and the demand for location-based services, Iwona Bancerek (INSEAD Research Associate), Beatrix Biren (Program Manager at INSEAD), and Christoph Zott (the Rudolf and Valeria Maag Fellow in Entrepreneurship, and Associate Professor at INSEAD) take you through Webraskas creation and history. They introduce its key executives, then outline its vision, technology, and evolving business and revenue models, before challenging you to brainstorm what could happen next.
As Durocher drove through Paris, he stopped to pick up three other Webraska players: Thierry Dumort (co-founder and CTO), Jonathan Klinger (Marketing Director), and Nabih Maroun (CFO). They were on their way to a weekend management retreat in Normandy, and on the road, they engaged in lively discussion.
They agreed that Webraska had survived and grown by evolving with the market. So, should they now shift their business model again to reflect the telecoms interest in purchasing their platform? If it did become a vendor of software platforms, what would be the likely strategic and organization implications of such a move? How could these be managed? And did the firm even have enough capacity and resources to meet the challenge of such a change?
The authors ask you to advise Durocher and his management team, but this case also offers you the chance to examine broader issues, such as the co-evolution of a young companys business and revenue models in a rapidly changing market. It also covers the implications of business model change, as well as the complex wireless value chain and telematics business.
This case is intended for MBA and executive programs, but may also used in advanced undergraduate courses.