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Q) Do you think the strategy followed after the security breach was effective?
Answer: The strategies and decisions in the hands of Flayton Electronics can be evaluated on
multiple dimensions. Let us look at the various available options and come up with possible
improvement in approach:
1) The current situation is pretty out of hand. If the company remain silent and do nothing,
they would face the risk of leakage at a later point in time. To effectively tackle the
upcoming crisis, Flayton need to build a robust crisis management strategy. They should
move quickly in holding dedicated sessions with affected customers, like conferences etc.
Once they expose the breach, they will face serious brand defamation, since the new will go
viral with media’s bad mouth and competitors’ selling points. Thus, a robust strategy to
handle the after crisis is very crucial. They need to set up dedicated toll-free hotlines to
address all issues quickly and transparently.
2) The executives should be able to handle security breaches more efficiently. On top of getting
fully PCI compliance, Flayton Electronic should have security team who thinks and act like
those tech-savvy criminals. They should be able to match the expertise of those hackers.
Brett must arm Flayton with a team of Forensic experts, Lawyers and accountants to
independently handle the situation. Armed with such team, the damage of the crisis can be
controlled to large extend.
3) Keeping the system vulnerabilities in place to hunt the culprit and assuring normal
transactions is not a very good option. It could lead to more data theft. This also implies
experimenting with security at the expense of customers’ valuable data.
4) Remaining quite is not a very good option, since sooner or later they will face the music. If
customers come to know later that, Flayton has been silent and not acting immediately,
customers will not trust them again. They would blame them for not been responsive and
caring. This will be a big blow to their brand image. Also, announcing the breach instantly
will create a situation of blame and law suits. Thus, Flayton will have to be very quick to
design compensation and loyalty programs to reinforce customers’ tie. They can quickly set
up and demonstrate breach-free systems to retain customers. Sergio should not be
complacent and be satisfied with the current PCI standard. Being passive and just merely
playing with compliance is not a solution. Real customer service comes with active
involvement and extra steps.
5) Coordinating effectively with the bank handling the transactions is another crucial step.
Usually the bank which effects the merchant transaction will ensure that the merchant is
compliant with PCI. They will be directly hit equally in case of security breaches. Robust
media strategy will be very crucial at this point since they are revealing the breach.
Q) Why were airwaves auctioned in Poland?
Answer: We will take two point of views to reason out why airwaves are auctioned in Poland:
1) Reasons intrinsic to the auction process
- Compared to other processes of spectrum allocation namely, Beauty contest, FCFS,
comparative bidding, lottery etc. auction process stands out to be a very efficient
method. Auction process can award the licence into the most capable hands. It will let
bidders value the bandwidth and based on their future revenue expectation the bidders
will bid for the most efficient pricing

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- Auction process will promote competition among the players. It will discourage
monopoly in the industry, by encouraging emerging private players to participate in the
process.
- Transparency is assured in an auction process. Since, lobbying and other influences on
the licence issuers is not possible in a competitive bidding, auction can be corruption
free. All parties can see monitor the process and see who won the bid and why they
won.
2) Suitability to the Polish telecom environment
- Telecommunication is one of the most neglected sector in Poland. Even though the
demand was high, the services quality was very erratic and inefficient. Introducing
competition among players will improve quality of service.
- Regulators can promote a competitive market or at least an oligopoly, by capping the
number of licenses held by a player. The current telecom market is dominated by TPSA.
They were even accused of holding monopoly. Thus, other players can be encouraged to
enter the arena, if auction process is streamlined and well designed
- Under the new Telecom act and the entity called URT, there was a plan to liberalize the
long-distance call market. Auction process can open up ways for telecom providers to
obtain licenses based on their capabilities to provide services.