AT&T  Strategic Formulation

  • AT&T is a high tech company competing in an emerging industry.
  • This means that there is a strong “first mover advantage,” and AT&T has done very well at maintaining that edge.
  • Strategies should then be based around three broad growth strategies.

–Technological leadership
–Preemption of strategically valuable industries
–Creation of customer-switching costs
 
Owing to the existing competition from Verizon, the company should focus on the following strategies.
The company should lower the prices for its product relative to that of its competitor and this may act to increase the market base (Morden, 2007).  Partnership with iPhone should be revived because this appears to have given Verizon a competitive advantage. This also extends to include partnerships with other companies offering SmartPhones because it appears this is current trend in the telephony industry.
The company should invest in global market and this will provide a fairly competing ground with Verizon. The company should focus in motivating employees and this retention of valuable talents whilst they are absorbed by the competitors.
Additionally, the company has focused on technological leadership because of a number of reasons. Technological leadership is an important facet to any organization because it enables the company to gain an initial market leadership before the competitors can do. This will enable the company to incur lower cost of sustaining itself in the industry. The company will obviously incur low advertisement cost and will be able to have a strong ground o9f its loyal customers. The technological advancements made by the company includes court phone developers which has played a significant role. Technological leadership in AT&T’s part is clearly depicted when it was the first company to  market the Apple’s iPhone. This became extremely advantageous to the company because it was able too secure about 17M subscribers.
Strategic Alternatives

  • Three strategic alternatives, that can be pursued collectively or independently.

–Technological leadership – Court phone developers for exclusive phone deals.  Improve infrastructure for data.  Provide additional functionality beyond traditional cell phones (tablets, laptops, streaming television.)
–Preemption of strategically valuable assets – develop market share in developing nations.  China, India, etc…
–Create customer switching costs – contract extensions before contract is up, multiple service “discounts” such as home phone, television, and internet.
Implementation of strategies is an important aspect in any organization that is seeking to regain its lost glory. The strategies set forth by the company should be implemented immediately in order to ensure that the gap with the competitor is greatly reduced. Implementation will begin when the company has set aside funds to facilitate the strategies. This means that the company will have to check on its credit leverage before implementing anything (Grant, 2005).  The objectives and goal of the company should be re-stated and the swill keep the employees more focused. Implementation of the strategies will be tested by existence of partnerships, enhanced global market share, increased customer satisfaction,  and entry to new market niches (Morden, 2007).
AT&T has a number of alternatives in order for it to regain the lost glory taken by Verizon.
First, the company may focus in investing in the global market. This will enable it to expand the market share and keep the revenue earnings constantly high. Additionally, the company also has the alternative of forming partnerships with other companies and this enables it to spread risks and improve its financial base. The company can also strategize in collaborating with Smartphone companies.
This enables the company to gauge customer response in relation to the products that company intends to purchase in the market. This can be done by having new assets for its 4G network and then monitoring the market response. The company can then venture into the real business of purchasing the required assets. The preemption of valuable assets is also a strategic alternative for the company in developing nations like China and India.

  • Technological Leadership

–This must be pursued no matter what other alternatives are selected.
–Can be accomplished in a multiple ways.

  • Recommend pursuit of additional exclusive deals with manufacturers.

Implementation of strategies is an important aspect in any organization that is seeking to regain its lost glory. The strategies set forth by the company should be implemented immediately in order to ensure that the gap with the competitor is greatly reduced. Implementation will begin when the company has set aside funds to facilitate the strategies. This means that the company will have to check on its credit leverage before implementing anything (Grant, 2005).
The objectives and goal of the company should be re-stated and the swill keep the employees focused. Implementation of the strategies will be tested by existence of partnerships, enhanced global market share, increased customer satisfaction,  and entry to new market niches (Morden, 2007).
This enable the company to gauge customer response in relation to the products that company intends to purchase in the market. This can be done by having new assets for its 4G network and then monitoring the market response. The company can then venture into the real business of purchasing the required assets.  AT&T has been performing pretty well in the America’s communication industry for some time now. This has enabled the company to reach the 95 million subscribers and 315 market share in the United states have provided a great opportunities for the company to expand. Just like any open market there has been some increasing competition form other players in the market. The entry of these new companies have resulted in reduced market share, reduced profits, and reduced total revenue.  The greatest competitor is Verizon Inc. and this calls for the company to adopt some new strategies in order to enhance and sustain its market share. Failure to do so will result will ultimately result in total market failure and the company should implement strategies to do so.

  • Preemption of strategically valuable assets

–By purchasing T-Mobile, they have “monopolized” the GSM (sim card using) phone market in USA.
–Get a foothold in developing markets.  They are the future.
–Already use linemen for AT&T Home services to maintain cell phones, cost advantages.
–Connections in developing world could lead to cost advantages in procurement of new products and technologies.
 
AT&T has a number of alternatives in order for it to regain the lost glory taken by Verizon. First, the company may focus in investing in the global market (Karami, 2007). This will enable it to expand the market share and keep the revenue earnings constantly high.
The other alternative is for the company to review the prices for the products it offers and by so doing the company will be able reduce them to a profitable while at the same time being receptive to the customer.  The company also has the alternative of forming partnerships with other companies and this enables it to spread risks and improve its financial base. The company can also strategize in collaborating with Smartphone companies (Grant, 2005). The company should also focus in using a different distribution and advertisement channels for its products.
The entry of Verizon to the market has presented scores of challenges to the company. This has been worsened by taking of the iPhone. This shows that need to implement the strategies in time. The company can do this be carrying out infrastructural within the network. This is possible through the investment of 4G network. This is possible also if the company recruits the best employees who can help them in the implementation of the strategies.
The company also been able to enhance its monopoly in the GSM through the acquisition of T-Mobile. This is a preemptive strategy on valuable assets and this has enable the customer to command a higher share of the market. In addition to this, the company has introduced linemen who are able to assist customers in the servicing of Home services. This has enhanced the cost effectiveness of the company.

  • Creation of Customer Switching Costs

–Leverage AT&T conglomerate status by featuring multiple product line discounts.  This creates a phantom cost to switching by increasing these other services costs.

  • Home Internet
  • Home Phone
  • Home Television
  • Corporate Services

–Offer early contract renewal.  For example, allow for renewal at 1 year, 9 months, for two years, giving incentive to renew before they are “free.”
 
The existing with Verizon is a wake up call for the company to implement a number of strategies and this will ensure that the company is able to sustain its current market leadership. The strategies include creating customer switch cost which can create a leverage and enhance the conglomerate status of the company. Some of the strategies include home internet, home iPhone, home television, and provision of internet services to the corporate sector. The company can also lower the prices for its product relative to that of its competitor and this may act to increase the market base.
Partnership with iPhone should be revived because this appears to have given Verizon a competitive advantage. This also extends to include partnerships with other companies offering SmartPhones because it appears that it is the current trend in the telephony industry. Invest in global market and this will provide a fairly competing ground with Verizon. Motivating employees and this retention of valuable talents whilst they are absorbed by the competitors.

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