The managing director of Hermes Telecommunications plc is interested in corporate strategy. Hermes has invested a great deal of money in established a network which competes with that of Telecom UK, a recently privatized utility. Initially Hermes concentrated its efforts on business customers in the South East of England, especially the City of London, where it offered a lower cost service to that supplied by Telecom UK. Recently, Hermes has approached the residential market (i.e. domestic telephone users) offering a lower cost service on long-distance calls. Technological developments have resulted in the possibility of a cheap mobile telecommunication network, using microwave radio links. The franchise for this service has been awarded to Gerbil phone, which is installing transmitters in town centers and stations etc.

What issues of competitive strategy have been raised in the above scenario, particularly in relation to Hermes Telecommunications plc. Note: i need long answer please