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Shattered Dreams: Level 3 Communications

Satisfactory Essays

1. What was the planned strategy of Level 3 Communications in the late 1990s?
Ans.
To offer low-priced fiber-optic network that covers connections to major cities in the US focusing on the internet traffic for service providers and corporations. The plan starting from gathering funding from investors to build up a high capacity fiber-optic network that linked major cities in the US, then cut prices to attract major users of the networks including corporations, Internet service providers like AOL and traditional telecommunications companies.

2. Why was Level 3 Communications able to raise so much capital?
Ans.
Because the business that Level 3 Communications were entering seemed to be promising in the view of investors.
2.1 A …show more content…

4. What have been the emergent strategies of Level 3 over the last few years? How do these emergent strategies fit with Level 3”s original plans?
Ans.
Emergent strategies were used to prevent Level 3 from bankruptcy.
4.1 Additional $500 Million cash were supported by the investors to acquire two software companies namely; Software Spectrum and Corporate Software so that Level 3 could ultimately use its fiber-optic networks to distribute and maintain the software made by companies such as Microsoft on the PCs and Servers as means to reduce cost
4.2 Level 3 consolidate the market by acquiring bankrupt competitor, Genuity at very low price.
4.3 Level 3 expand to offer Voice over Internet Protocol services to consumers and corporations aiming at market dominated by traditional wire line telephone companies.

5. Were any cognitive biases at work at Level 3, other communications companies, and the investment community during 1997-2001? What were those biases ? what were the effects of those biases? How might an entrepreneur like Jim Crowe have avoided them?
Ans.
Yes, there were cognitive biases at Level 3 and other companies as well as the investors during 1997-2001. The biases were…
5.1 The statement in 1996 by Michael O’Dell, the chief scientist at UUNET that internet service had growth of 1000 percent. Later on, in October 1998, there was a study conducted by an internet researcher at AT&T labs; Andrew Odlyzko that the

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