-Analysis of Company’s Strategies (Original)
Evaluation and Control
-Analysis of Evaluation and Control (Original)
Recommendations for the Future
4 pages in total (double space)
Case Analysis: AT&T
Professor: Rhonda Rhodes
To: Rhonda Rhodes
RE: Case analysis of AT&T
This case Analysis provides an in-depth analysis of AT&T
· An Analysis of the External environment including competitors
· An analysis of AT&T’s Internal Environment is provided.
· AT&T’s Vision, Mission, and Objectives are listed and discussed.
· Evaluation and Control of AT&T.
· How AT&T fulfills their Social Responsibility is provided.
· The report concludes with Conclusions about AT&T.
· My original Recommendations on what AT&T should do in the next five years.
Table of Contents
Introduction 1 Overview of AT&T 1 Vision, Mission and objective 2 Vision 2 Mission 2 Objectives/Goals 2 Analysis of mission, vision and objective 2 External/Industry Analysis Macro Environment General Economic Conditions Global Forces Technology Societal values and lifestyles Legislation and Regulation Analysis of Macro Environment (Original) Immediate Industry and Competitive Environment Suppliers Substitute Products and Rival Firms Buyers New Entrants Analysis of company’s Industry and Competitive Environment (Original) Internal Analysis Resources Innovation Company Culture Corporate Governance/Organizational Structure Social Responsibility Analysis of company’s Internal Standing (Original) Company Strategy Corporate Strategy Business Strategy Functional Strategy Analysis of Company’s Strategies (Original) Evaluation and Control Tools/Techniques/Procedures Successes/Failures Analysis of Evaluation and Control (Original) Recommendations for the Future Reference
In this report, we analyze about AT&T company. We point out our analysis of Vision, Mission, and Objective in the first section of this report. In the second part, we discuss all external and industry factors which have direct effects on AT&T. In this part, we divide into Macro Environment and AT&T’s Immediate Industry and Competitive Environment. We analyze general economic conditions, Globe Forces, Technology, Social Value & Styles, Legislation & Regulation in the part of Macro environment. We go over Suppliers, Substitute Products, Rival Firms, Buyers, and New Entrants in the Immediate Industry and Competitive Environment section. In the next part, we analyze all internal factors including resources, innovation, company culture, corporate governance/organizational structure, and Social Responsibility. Then, we will go deeper into detail with the next sections are company strategy and evaluation and control. In the last part we will give our recommendations for the future of AT&T.
AT&T Corp was established by SBC Communications Inc., which is also known as Southwestern Bell Corp. AT&T Corp is a global leader in providing telecommunications, media & entertainment, and technology. It is headquartered in Texas and operates in the market under four segments: Communication, WarnerMedia, Latin America, and Xandr. With the Communications segment, AT&T provides entertainment and communications experiences to its customers across TV, mobile, and broadband services. Mobility, Entertainment Group, and Business Wireline are the main business components. In the WarnerMedia segment, AT&T focuses on providing entertainment content such as films, television, gaming under digital or physical formats. Turner, Home Box Office, and Warner Bros are the three primary business units of the WarnerMedia segment. Latin America segment is a segment that AT&T divides into the two main components. The first one is to provide entertainment services in Latin America. And the second part is focused on providing wireless services in Mexico. The two business units under the Latin America segment are Viro and Mexico. The Xandr segment mainly focuses on all advertising services (Reuters.com, 2020).
“We aspire to be the most admired and valuable company in the world. Our goal is to enrich our customers’ personal lives and to make their businesses more successful by bringing to market exciting and useful communications services, building shareowner value in the process” (Comparably.com, 2020).
“Our mission is to exploit technical innovations for the benefit of AT&T and its customers by implementing next-generation technologies and network advancements in AT&T’s services and operations” (Farfan, 2019).
“We’re continuously building our wireless and wired networks to enhance reliability, coverage, speed and overall performance to help address global business challenges and engage citizens for the greater good” (about.att.com, 2020).
In the vision statement, AT&T emphasizes that it plays a significant role in improving both lives and business performances of its customers. It also wants to add more value to the lives of its customers. With this statement, AT&T expresses its ambition to be “the most admired and valued company in the world.” AT&T successfully achieves its vision and continually maintains all accomplishments. For instance, AT&T’s communications provide the service for more than 100 million U.S. consumers. It also recognized the best Nation’s network and, for the 6th quarter in a row, the fastest wireless network. It also serves high-speed, highly secure connectivity and smart solutions for about 3 million businesses including nearly all the Fortune 1000 (investors.att.com, 2020). In the mission statement, AT&T points out all strategies, which help the company to achieve its vision for the future. In the mission statement, AT&T admits that all customers can benefit from its technological activities and while emphasizing how much the company values its clients. From knowing what it must do, AT&T can improve its progressiveness and achieve its vision. Beyond that, in the goal statement, AT&T restates its mission statement in another way but with a clear objective. To enhance the experience of customers with its services, AT&T will invest its money to develop and apply all new technological innovations. Customers will perceive all changes and improvements in all AT&T services.
U.S economic struggles a lot due to the impact of Coronavirus. The “stay-at-home” orders issued in March and April and social distance practice directly affect how and when consumers spend their money. Also, the increase in the unemployment rate is another thing impacting the U.S Economic. The gross domestic product (GDP) of the United States in 2020 decreased by 5% in the first quarter and 31.7% in the second quarter (Bureau of Economic Analysis, 2020). The drop in GDP in 2020 is worse than the 26% drop during the Great Depression because the current decline rate quickly happened in 3 months instead of the four years it took during the Great Depression. (Amadeo, 2020). Like other businesses in the United States, AT&T’s revenue declined after the virus broke out in march of this year. In the first quarter of 2020, AT&T earned $4.61 billion while it earned $4.86 billion in the same quarter in 2019. AT&T’s revenue in 2020 dropped 4.8% to $42.78 billion (Reardon, 2020).
Rapid changes in technology have brought new opportunities and challenges to AT&T. AT&T must update all innovations quickly to provide its customer with the best products and services at a reasonable price. If not, its competitors could gain AT&T’s status in the communication industry. However, AT&T always tries to update new technologies and invest funds to maintain and develop its network and service. For instance, a 5G network is a new technology that all telecom providers want to provide to its customers. And AT&T wins in the running to launch a 5G network. In December 2019, AT&T was the first U.S company to launch a 5G network in the market. The launch of the 5G network earlier than competitors allows AT&T to test the fast, reliable, and secure of its 5G network before the release of the 5G smartphone in the market in the next few months. At the same time, it offers new plans with multiple speed tiers for the current 4G wireless network (Hollander, 2019). AT&T plans and applies its business strategies quickly to adapt to the change in the telecommunication industry to help maintain its status while improving its customer experience.
Technological innovation is the key to determining the success of AT&T’s operation because AT&T emphasized in its mission statement that its customers will benefit from its technology activities. Thus, technological innovation can help AT&T improve the lives of its customers and solve some social problems by delivering all-new next-generation products. Like other operators, AT&T wants its customers to have a faster and more responsive network experience. Hence, AT&T is continuously building its wireless and wired networks to improve performance for its customers. For instance, like other telecommunication providers in the United States, AT&T is currently focusing on the deployment of 5G wireless technology. New technologies can improve the overall performance of consumers and enterprises. From 2015 to 2019, AT&T spent more than $135 billion in capital investment and acquisitions of wireless spectrum and operations to build its wireless and wired networks (about.att.com, 2020).
On Dec 13, 2019, AT&T launched its 5G network for the first time in Birmingham, Alabama.; Indianapolis; Milwaukee; Pittsburgh; Providence, Rhode Island; Rochester, New York. For California, the AT&T 5G network was available in Los Angeles, San Francisco, San Jose, and San Diego. According to an announcement on the AT&T website on June 29, 2020, its customers in 355 markets in the United States can access AT&T 5G network. On July 23, 2020, AT&T’s 5G network is also available in 40 new additional markets. Starting on Aug 7, 2020, all AT&T consumers who currently have unlimited wireless plans can access AT&T 5G without paying any extra fee (about.att.com, 2020).
Societal values and lifestyles about.att.com
In its statement of mission, AT&T wants to improve both the live and business performance of customers, so it will also focus on creating its social values and lifestyle. On AT&T’s website, one of its core values on its website is to be there when customers and colleagues need you most. AT&T wants to be together with its customers during the Covid-19 pandemic. All educators, doctors, and their families can be eligible for the new saving deal of unlimited wireless plans. For customers who cannot pay their bills and have financial difficulties, AT&T will not charge more for over data usage and waives late fees. Also, due to Covid-19, the education system changed to adapt to the current situation. In this new school year, all schools started to use learning distance. AT&T also distributed more than $1 million to organizations that help teachers to prepare for a new academic year. Besides, AT&T distributed $10 million this year to support Black and underserved communities who face social inequities and have a higher unemployment rate. It also focuses on solving environmental problems. AT&T wants to deliver all-new technology for its customers, but at the same time, AT&T also mitigates its impacts on the environment. So, AT&T sets up its goal and acts immediately. Based on its current road map, AT&T continues to reduce its emissions while increasing resource efficiency and alternative energy deployment in 2020. And in the year of 2025, AT&T can save 10x of the footprint of carbon. It also commits that AT&T will become carbon neutral by 2035. Besides, AT&T also focuses on developing the climate change analysis tool because this tool can help it to identify its potential impacts of climate change on its network and operations and prevent the interrupted services (AT&T’ roadmap to 2025, 2020).
Like other communications companies in the United States, AT&T must comply with all regulations and legislation set by the Federal Communications Commission (FCC). In 2015, FCC passed a new law called Network Neutrality (Net Neutrality) to prevent all internet providers from accelerating or slowing down their internet speed to certain websites, platforms, or online content (Ross, 2020). In other words, AT&T must keep the internet always open and free to its customers. It must not intentionally favor or prefer specific websites, applications, or content over the other one to its customer. However, AT&T was fined $100 million due to the violating Net Neutrality in 2015. AT&T claimed to intentionally limit the internet speed of customers who reached the limit cap of their monthly data plan from 2011 to 2014. It still happened in 2015. Although AT&T notified its customers about the slowness of the internet, not all customers knew (Furchtgott-Roth, 2015). Fortunately, in 2019, FCC repealed the Net neutrality rules and allowed each state to determine its network regulations (Ross, 2020).
Now AT&T is committed to providing the open and free internet to its customers by following FCC’s Open Internet Order and regulations of each state as well as its own four core standards: freedom, innovation, competition, and transparency to satisfy the needs of its customers (att.com, 2020). With this new internet policy, AT&T’s consumers can access all online content, websites, and platforms if all of these do not violate network management or are harmful. Consumers can also get clear and concise information about speed, cost, and traffic management. They are free to choose the best service and innovation.
At the current period, all external factors have an impact on AT&T’s operation, especially the recession of the economy due to the pandemic of COVID-19. But AT&T can still maintain its position in the communication industry because AT&T understands what it needs to change in its business strategies to adapt to the current situation. Moreover, AT&T knows that providing the best services and experience for its customers is its priority goal, so speedily applying a new technology innovation is an essential thing in its business strategy. If AT&T continues to plan its operation strategies more accurately, it can leave its competitors behind. Besides that, AT&T also focuses on the development of its branding image by its values. For example, during the pandemic of COVID 19, AT&T offers special deals for educators, nurses, doctors, and their families. If customers let AT&T know about their financial difficulties, AT&T waives the late payment fee or does not charge for data, text, and voice usage. Furthermore, AT&T committed to developing its policy by following all legislation and regulation for the communication industry.
Immediate Industry and Competitive Environment
Suppliers are a key to help AT&T to achieve its business goals and objectives because both are together to provide a service to exceed customers’ expectations. Today AT&T has a supply chain with more than 20,000 suppliers around the world. In these suppliers, 5,000 vendors are the main supplies. These suppliers engage in all of AT&T’s operating activities. Before the launch of the 5G network in Dec 2018, AT&T announced that Samsung, Ericsson, and Nokia were the suppliers for its 5G network equipment (Dano, 2018). AT&T awards honorary awards to suppliers who provide excellent products and services while improving cost structure and innovative methods. In 2018, seven vendors won the AT&T honor award, including Alorica, Asurion, Cisco, Communications Test Design Inc., Hiya, Humax, and Tech Mahindra (about.att.com, 2020). With AT&T, the suppliers also are a part of the company, so it’s significant if these suppliers follow AT&T’s approach to sustainability and diversity.
Substitute Products and Rival Firms
Unlike other industries, the level of competition in the telecommunications industry is higher because most telecom companies provide the same or similar services and products. The potential difference between all competitors is the price and experience in the speed of network and customer services. Another key to winning the competition is how each telecommunications company improves brand awareness and the frequency of technological and innovation upgrades. Contrasted with its competitors, AT&T performed well. For example, AT&T is the first company to launch a 5G network in the United States. Or AT&T acquired television provider DirecTV to bundle television and wireless packages for consumers. AT&T customers now can allow streaming DirecTV content via TV everywhere by DirecTV Now. AT&T also launched a streaming media package that bundles Time Warner’s programs, called Watch TV (Abril, 2018). These special services provide AT&T customers with a new experience at a reasonable price. Altice USA, Comcast, Deutsche Telekom, Charter Communications, Frontier Communications, Telephone and Data Systems, Vodafone, Verizon, and NTT are recent AT&T’s competitors (craft.co, 2020). The two biggest competitors are Verizon and T-Mobile that is a subsidiary of Deutsche Telekom in the United States and currently merged with Sprint.
The two main customer categories are residential customers and commercial companies. According to each market segment, AT&T’s target customers will be different. For example, under the AT&T Communications Division, AT&T provides nationwide wireless services to residential consumers and commercial companies located in the United States and U.S territories. AT&T serves more than 100 million U.S. residential customers and 3 million companies, including Fortune 1000 companies. Or for the Latin America segment, AT&T offers mobile services to consumers and businesses in Mexico while providing digital entertainment services for all consumers in South America and the Caribbean (investors.att.com, 2020).
The threat of new entrants on AT&T is low or moderate because when entering the telecommunications industry, new companies must have high capital to build their telecommunications infrastructure to compete with AT&T (Smithson, 2017). Besides, the brand awareness of AT&T among buyers is very high. So, it is so hard and needs to take time for new entrants to develop and achieve brand awareness as AT&T. Moreover, the telecom industry in the United States has matured, and it reached saturation levels (Sheffer, 2014). These obstacles prevent new companies from entering the telecommunications industry. To maintain its current position and grow, AT&T needs to continue providing exceptional services to exceed the customer’s expectations at lower prices when compared to its competitors such as T-Mobile, Verizon, Frontier, etc.
The industry and competitive environment have brought both challenges and opportunities to AT&T. With the higher level of competition in the market, AT&T must enhance the quality of its services to attract a new customer by expanding its infrastructure and network. Otherwise, the price is a potential factor that determines the customer’s return after the contract expires. If AT&T can focus on meeting the above requirements, then customer loyalty to them will increase. Then, AT&T must focus on maintaining competitive advantages, especially brand awareness, effective marketing and advertising strategies, and high-quality products and services that can increase profits while protecting its position in the communications industry.
AT&T’s SWOT analysis is a framework for evaluating external and internal factors to have an impact on the telecommunications industry. AT&T’s internal analysis helps to understand and enhance the company’s strengths and weaknesses, the external analysis gives insights into the opportunities that can act as major growth drivers for AT&T and help build revenue opportunities in this digital era (swotandpestle.com, 2020). The SWOT analysis for AT&T company is presented below in the matrix:
SWOT & PESTLE.com
Innovation has allowed AT&T to maintain its leading position. AT&T is known for quickly adapting to consumer needs and changes in new competitors. AT&T embraces creativity in order to rapidly convert ideas into useful products and services. Innovation factors have a significant impact on management, so much so that AT&T has a laboratory composed of approximately 1,000 world-class scientists and engineers. In the planning phase of new products and services, the management team will evaluate the current products and services and try to find ways to improve new products and services to customers (lawaspect.com, 2020).
Palmer says AT&T is proud to be at the forefront of education innovation in the telecommunication industry. “We are always constantly open to sharing with others our best practices. We’re still learning every single day. We use it at all levels. It’s a culture of continuous learning” (Schindelheim, 2018).
AT&T’s company culture is its values on its website, “Working here is more than just a job title. It’s about sharing in something greater, doing incredible things and living out our values. No matter who you are, you’ll find endless ways to be a part of it.” (att.jobs/culture) Here are eight values what I like from AT&T:
1. Live true – Do the right thing, no compromise.
2. Think big – Innovate and get there first.
3. Pursue excellence – In everything, every time.
4. Inspire imagination – Give people what they don’t expect.
5. Stand for equality – Speak with your actions.
6. Embrace freedom – Press, speech, beliefs.
7. Make a difference – Impact your world.
8. Be there – When customers & colleagues need you most.
Corporate Governance/Organizational Structure
AT&T’s governance is the most important promise they can make to customers, shareholders and each other, and it is their adherence to the highest standards of honesty, integrity and respect. (about.att.com) Here are AT&T Organizational Structure:
John Stankey – Chief Executive Officer, AT&T Inc.
Ed Gillespie – Senior Executive Vice President – External and Legislative Affairs
David S. Huntley – Senior Executive Vice President & Chief Compliance Officer
Jason Kilar – CEO, WarnerMedia
Lori Lee – CEO – AT&T Latin America & Global Marketing Officer, AT&T Inc.
David R. McAtee II – Senior Executive Vice President and General Counsel, AT&T Inc.
Jeff McElfresh – CEO, AT&T Communications
Angela Santone – Senior Executive Vice President – Human Resources, AT&T Inc.
AT&T’s social responsibility is to establish connections with each other. People need to flourish in their daily lives and with important stories and experiences. On AT&T’s website, we can see and find the latest social responsibility news. For example, the news “FirstNet Gives First Responders Tools for Health and Wellness” is about FirstNet helps first responders who are struggling with health and wellness challenges increase education, resources, and support opportunities. (about.att.com)
Overall, the success of AT&T is mainly led by the innovation and responsible behavior of these leaders. According to the SWOT analysis, we can see that AT&T’s strength is indeed that it has become a large telephone network company in the United States, but its weakness is that its signal coverage is very poor, especially in remote places. Network communication is indeed very convenient. It allows people from different places to communicate, breaking the old way of communication in correspondence. Network communication allows us to know the latest information more quickly, and life becomes better. This is also the main thrust of AT&T.
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