AT&T Strategic Analysis

Ebrahim Alavi| Tina Sepehrifar| 2016
AT&T (American Telephone And Telegraph)
Strategy Analysis

01 02 03
Overview of the Company Analysis Strategy Implementation
History
Vision and Mission Statement
Services
Business Model
Market Share
Financial reports
Partners, M&A
External:
• PESTEL
• Porter’s Five Forces
Internal:
• Porter’s Value Chain
• 7S Mckinsey
• BCG Matrix
SWOT
Strategies Analysis
Strategic themes
Balanced Score Card
Control and Monitoring (CSF and KPI)
Table of Content

Your own footer Your Logo
History

 Vision
To design and create in this decade the new global network, processes, and service
platform that maximize automation, allowing for a reallocation of human resources
to more complex and productive work.
 Mission
To exploit technical innovation for the benefit of AT&T and its customers by
implementing next-generation technologies and network advancements in AT&T’s
services and operations.
Vision and Mission Statement

Mobilizing Your World-2014
Your World. Delivered-2007
Raising The Bar-2004
What Do You Have To Say-2000
Rethink Possible-2010
More Bars in More Places-2006
Fits You Best-2002
AT&T Slogans

 Mobilize your enterprise and change the way you
conduct business. Receive real-time information to help
accelerate almost any process: capture medical records,
monitor inventory from the field, place orders on the go
or allow machines to communicate. AT&T can help
mobilize your business.
Network Services
 Keep your workers connected, in and out of the office.
Build a reliable, scalable wired or wireless network
solution for your enterprise. Learn about VPN, Ethernet,
Wi-Fi, Internet Connectivity, Ring and Network Sourcing
and Integration solutions from AT&T.
 Create a path for growth for your enterprise. Our VoIP
services help integrate technologies such as cloud
computing and UC to make your business more efficient,
enhance collaboration and improve scalability. Learn
about VoIP, Hosted VoIP, UC VoIP, SIP Trunking and
contact center solutions from AT&T.
Internet of Things (IoT)
 The Internet of Things (IoT) is transforming the way we
live and work. With IoT solutions, you can connect and
monitor devices and equipment from virtually
anywhere. AT&T IoT solutions can help you reach the
bottom line faster by creating new business models,
automating processes, and improving operational
efficiencies.
Mobility Services
Voice Services
Services

 Products and services designed to help protect the
resources your business depends on most and provides
you with the tools to prevent, detect and respond to
threats.
Cloud Services
 Efficiently scale your network to manage unexpected
business activity. Improve productivity by moving
storage, computing, applications and desktop
environments into the AT&T cloud. Rely on the
availability and security of AT&T Internet Data Centers to
provide the performance capabilities your solutions
need.
 Collaborate in today's work anywhere world. Using a
multi-vendor approach, AT&T helps bring together
instant messaging, conferencing, email and voice calling
for seamless communications. Extend functionality to
mobile devices with our "any application to any device"
approach. Learn about UC.
Enterprise Mobility Management
 Enterprise Mobility Management is a compilation of
advanced mobility solutions, from network security and
device control, to content distribution, workspace
management, and through the entire lifecycle of
application development.
Network Security
Unified Communications
Services

 Support your application at every phase of its lifecycle.
AT&T can help you get more value from your software
investments and maximize the efficiency of your apps.
For full operational support, host and manage mission
critical applications in our global Internet Data Centers.
Hosting Services
 Get the platform you need to support your most
demanding applications and processes. AT&T provides
flexible, pay-as-you-go services backed by 38 enterprise-
class data centers worldwide and enterprise-grade SLAs.
 Empower commerce and interaction in an ever-changing
digital landscape. Our ecosystem of API (Application
Programming Interface) services opens up access to
valuable data and core functions within the AT&T
network—so you can build powerful features into
applications, optimize processes and create quality
experiences.
Others
 Digital TV
 U-verse TV
 DIRECTV
 DISH
 Home Phone
 U-verse Voice
Application Services
APIs
• Landline
• Wireless Home Phone
 Home Security
 Digital Life
Services

32.1
36.5
15.4
10.7
5.3
AT&T Verizon Wireless Sprint Nextel T-mobile Others
Market Share (2015, USA)

Financial Report- Operating Revenue Worldwide

Financial Report- Selected Data

Financial Report- Segment Results

Financial Report- Stock Performance Graph

Financial Report- Stock Performance Data

Financial Report- One Year Stock Performance

1994 1998 2005 2013
purchased the
largest cellular
carrier, McCaw
Cellular
purchased
long-distance
provider
Alaska
Communicati
ons System
announced a
US$1 billion
alliance with BT
to offer global
voice over IP
(VoIP) services
purchase
IBM's Global
Network
business
SBC purchased
AT&T Corporation
acquired
Wayport, a major
provider of
Internet hotspots
in the United
States
acquire Leap
Wireless
1995 1999 2008
Partners, M&A

1. PESTEL Analysis 2. Porter’s Five Forces Analysis
External Analysis

 Primarily, the company started their strategy by making the brand more profitable. This is to build a
strong financial foundation. The main changes that had happened are from the accounting practices of
the company. During the said changes and process of restructure, there are different political factors that
might be considered. One of this is the environmental issues. As of now, more and more individuals and
organizations are focusing on different issues regarding the environment. The fact that the company will
be outsourcing from other countries, there are different international as well as local laws that must be
considered in order to maintain the continuous process of the development. The trade restriction and
tariffs are also another of the most important political factors that must be considered. This is due to the
fact that the company already followed the strategy of Adidas and Nike in outsourcing their production in
Asia. The primary reason for outsourcing of production is because, most of Asian countries offer lower
labor cost and other taxes compare to Europe and America. In terms of political stability, due to the fact
that the company is a multinational company that produce as well as sell their products in different parts
of the world, there different political issues and events in other local partners that can affect the overall
performance of the company.
PESTEL Analysis-Political Factors

 The said situation in the political factors, are somewhat connected with the different economic factors
that might affect the development process of the company. Primarily is the situation of the home
economy or the economic situation of Germany, in terms of monetary issues, stock exchange and the
likes. The economy trends of happenings in the home economy are also important, so as the economic
situations and trends of the partner countries. This is due to the fact that, this political factor has a great
impact to the social mentality of the possible customers. The different employment laws in different
countries must also be considered, this is due to the fact that different countries has their different
cultures that might affect their beliefs as well as regulations regarding the human resource aspect of any
company.
PESTEL Analysis-Economical Factors

 The fact that more and more people are into sports is a big chance or advantage for the company,
because there will be a huge market for them. Another important thing is that sport is considered as one
of the most important sector in the tourism industry, which considered as the most successful industry
nowadays. On the other hand, sports are also considered as a form of exercise, for those who wants to
have fit and healthy body.
 It is also important for the company to consider the change of customer behavior as of now. More and
more customers are oriented towards different high-value and lifestyle-oriented products. It means that
more and more people are availing luxury products.
 strategy it is important to use fashion and role models that will help the brand to spread and rise brand
awareness to the possible customers. The image of the models of the brand is also important; this is due
to the fact that those artist or individual can be considered as part of the brand itself.
 Ethical issues pertain to the corporate social responsibility or CRS of the company. It is the activity that
helps the company to connect with the different ethical values, transparency, human resource relations,
compliance with legal requirement as well as their respect for the communities in which they operates
and works
PESTEL Analysis-Social Factors

 In terms of the technological factors, it focuses on the series of R&D activities as well as applications of
automation and new technologies, most especially those that are connected to the Internet. Another
important thing that might affect the development is the maturity of the technology; this is due to the
fact that technology is considered as restless in terms of development. Furthermore, the global
communication is also another important aspect, this is important because the company is operating in
different part of the globe. It is also important to consider the different laws like the intellectual property
issues.
 New Inventions: Mexican market is the growing and well established market so many companies wants
to enter in to the market and earning a lot. So they doing something different to the local company so
they always give better and upgraded product compare to the local company so it's always effect to the
company that how can they give the new technology to the customer and convince then to use this
technology. Etc. Wi-Max and 3G
PESTEL Analysis-Technological Factors

 Each telecommunication company should be committed to following the most stringent environmental
compliance laws applicable to their operations. When conducting operations abroad, they should abide
by U.S. environmental compliance laws if they are more rigorous than the laws in the country where they
are conducting business. AT&T operating companies had one significant environmental compliance-
related enforcement action (defined as those actions that resulted in sanctions equal to or exceeding
$100,000) in 2014.
 Telecommunication companies should adopt an Environment, Health and Safety (EHS) Management
System based on the principles of International Standards Organization (ISO) 14001 and Occupational
Health and Safety Assessment Series (OHSAS) 18001.
PESTEL Analysis-Environmental Factors

 There are a number of agencies concerned with telecommunication policy:
– The National Telecommunications and Information Administration (NTIA)
– The Federal Communications Commission (FCC)
 Broadband deployment policy objective:
– Broaden the deployment of broadband technologies
– Define broadband to include any platform capable of transmitting high-bandwidth intensive services
– Ensure harmonized regulatory treatment of competing broadband services
– Encourage and facilitate an environment that stimulates investment and innovation in broadband technologies and services
PESTELAnalysis-Legal Factors

 The rivalry among AT&T and its competitors is easily some of the most cut throat of any industry. The
telecommunications industry is saturated, virtually every American has a cell phone all the way down to 6
and 7 year olds; the only customers these companies are attracting are customers who are with a
different carrier. There have already been a few mergers and acquisitions of carriers, AT&T was once
Cingular back in 2004, Sprint acquired Nextel in 2005, Verizon acquired Alltel in 2009 and AT&T's failed
attempt to acquire T-Mobile in 2011.
Rivalry between existing firms is extremely intense.
Porter’s Five Forces- Degree of Rivalry

 AT&T supplies its own data and builds out its own networks. It does require some cooperation from the
phone companies to sell its phones but AT&T has the upper hand in these business negotiations due to
its extensive customer base. But to carry the iPhone, AT&T does pay Apple a generous percentage of its
revenue from iPhone customers data plans.
The bargaining power of suppliers for AT&T is extremely low.
Porter’s Five Forces- The Bargaining Power of Suppliers

 On one hand you have customers that do sign two year contracts and if they decide to break that
contract there are going to be exorbitant fees per phone for the cancellation. But on the other hand,
when customers are out of contract they can demand free phones, lower and special rates, free minutes
all for signing another two year contract with AT&T. As you can see it really depends what part of the
spectrum the buyer is on at that moment in time to determine the bargaining power they have.
The bargaining power of buyers for AT&T is moderate.
Porter’s Five Forces- The Bargaining Power of Buyers

 This threat is extremely low because: high capital requirements, government regulations, building up a
brand name, patents, geographical location, technology and building relationships with phone handset
manufacturers and customers; this list can go on and on. AT&T does not need to worry about new firms
entering this market.
The threat of new entrants for AT&T is extremely low.
Porter’s Five Forces- Threat of New Entrants

 For the most part all four competitors offer the same fundamental services, which are talking, texting
and web surfing. What does help limit this force is the somewhat high switching cost of breaking a
contract, activation fee, limited number of competitors, and that two of the three competitors have
inferior service compared to AT&T and its network. This is one of the most important forces AT&T needs
to keep a watchful eye on to maintain its competitive advantage.
The threat of substitute products and services is fairly high for AT&T.
Porter’s Five Forces- Threat of Substitutes

Value Chain
Porter
7S
McKinsey
BCG
Matrix
Internal Analysis

General
administration
HR
management
Technology
development
Procurement
OperationsInbound logistics Marketing and salesOutbound logistics Service
AT&T has quite a good management that has continually increased earning for the company.
AT&T human resources has a never ending job on hand.
AT&T has a great R&D department, helping create one of the fastest networks in USA.
AT&T has great relationships with wireless equipment makers.
AT&T does not
have inbound
logistics for
transporting raw
goods. They ship
phones to stores to
be sold via UPS.
AT&T helps design
the fast 4G
network out today.
Placing Cell towers
around cities and
states to deliverthe
most wide spread
and fastest
network possible.
AT&T spends a lot
of money on
advertisement
AT&T provides service updates for
customers phones, as well as
physically services customers
phones in the stores.
Value Chain Analysis

7S Mckinsey Analysis- Structure

 Ed Whitacre, former chairman of the board and chief executive officer of AT&T , did a great job of
acquiring and assembling a terrific set of operational assets, and each of the companies had its own
culture, its own personality and ways of doing things. for those assets to perform at their optimal level,
they needed to blend into a single identity and culture – a consistent way of thinking about things, a
consistent style of execution. They intend to be ‘One AT&T.’”
 They have a close-knit senior executive team. They know each other, spend time together, work together
and, as a result, they have confidence in one another. There’s trust that the next person will do the right
thing, and there’s trust in each other’s ability to execute and play their position. That kind of trust helps
you move quickly; it increases your speed. When it’s absent, you can see it – more checks, controls and
processes. That’s bureaucracy. Building a team where there’s a high level of trust is really important.
7S Mckinsey Analysis- Style

 AT&T expends a significant amount of resources to create several major programs versed in Leadership,
Management and Business Learning:
 Leadership Development Program (LDP) is a two year rotational program for recent bachelor and MBA
graduates with outstanding leadership potential. Established in 1988 LDP is AT&T’s flagship leadership
development program. The goal of the program is to develop competitive leaders with the skills and
experience to perform well in various positions and organizations across the company. Rewards include
career development, exposure to key areas within AT&T, frequent developmental feedback and
accelerated career growth for successful participants
 IT MATREX (Management Transition Exchange) is the Information Technology hiring program for high
motivated individuals. The group consists of recent college graduates in the areas on client/server
mainframe and Web development.
 The Financial Leadership Program (FLP) is designed to give individuals the breadth and depth of business
experience necessary for a successful career. FLP participants are rotated through high profile decision-
making positions in which they work directly with key members of the senior management team of AT&T
Finance. This program is centered on entrepreneurial thinking.
7S Mckinsey Analysis- Staff

 AT&T University: AT&T University helps them accelerate growth, foster innovation, and develop
leadership capabilities at every management level. Since the opening of AT&T University, more than
100,000 managers have participated in a robust blend of onsite and virtual classroom sessions.
 AT&T Connect to Success: This mentoring program is designed to connect selected managers in fruitful
mentoring relationships and foster leadership training opportunities for all, including women and people
of color. AT&T Connect to Success provides a broad range of managers with the ability to deepen their
networks, develop and strengthen a variety of areas, and broaden their collaboration skills.
 AT&T Self-Development Resource Center: This virtual resource center supports all employees in
developing strategies to remain competitive in their work environment.
 Career Movement: Management and occupational employees can nominate themselves for job openings
throughout the company. Hiring managers are provided with a diversified pool of qualified job
candidates.
7S Mckinsey Analysis- Skills

 AT&T integrated Global Enterprise Management System (iGEMS) is a sophisticated, end-to-end global
network management platform that enables AT&T to monitor and manage the performance of your
networks, servers and applications in a proactive, predictive and preventative manner.
 Providing the management infrastructure of an AT&T Enterprise Hosting solution, whether in an AT&T
Internet Data Center or on a customer’s premises, iGEMS allows highly qualified operations teams to
quickly and efficiently diagnose issues or predict potential problems and take corrective actions.
 Not only does iGEMS provide valuable data for AT&T support teams, but iGEMS also feeds data to AT&T’s
award winning BusinessDirect® Portal for customer access to crucial data about their environment.
Customers can view near real-time and historical performance reports on their servers, operating
systems and applications.
7S Mckinsey Analysis- System

 AT&T Wireless has successfully executed it strategy growing its Operating revenue by 14%. Through the
integration and cleanup of legacy AT&T wireless and Cingular Wireless, churn has been reduced to 1.7%.
This is a direct indication of improved value and service to its customers. Contrary to Sprint-Nextel the
merger of networks was the best solutions due to the similarities in the GSM technology.
The strategy to enter into a two year exclusive deal with APPLE to market and sell the iPhone has proven
successful. Even with the EDGE network the satisfaction of the iPhone has differentiated AT&T from its
competitors. The stakes here have been raised and AT&T will look to see even more competition from
Verizon, Sprint-Nextel and T-mobile.
7S Mckinsey Analysis- Strategy

 AT&T is committed to acting responsibly in every way and to improving the quality of life in the
communities it serves.
 Guided by a rich heritage and time-honored values of honesty, integrity, openness and respect, they are
driven to deliver on their promise to always do the right thing.
 AT&T’s philosophy toward corporate social responsibility reinforces a commitment to serving their
customers, stock- holders, employees, suppliers and communities with attention to quality, care and
value. A central component of their philosophy is AT&T’s insistence on behavior that is consistent with
good citizenship on a global scale.
 AT&T’s global citizenship commitment encompasses good corporate governance; innovation; community
engagement; volunteerism and philanthropy; diversity and inclusion; and environment, health and safety.
7S Mckinsey Analysis- Shared Value

Broadband services Wireless services
Smart Phones TV cable services
BCG Matrix

 Largest provider of broadband in U.S.
 World's largest communications holding company by revenue.
 Broad portfolio of complementary products and services (wireless communications, local exchange
services, long-distance services, data/broadband and Internet services, video services,
telecommunications equipment, managed networking, wholesale services, and directory advertising and
publishing).
 Extremely capable network capacity, both physical (fiber optics) and wireless (including a growing 3G
network).
 AT&T Wireless exclusivity with Apple's iPhone.
S.W.O.T. Analysis-Strengths

 AT&T’s wireline voice business has been on a sharp decline in recent years. Total voice revenues have
decreased 2.28 billion since 2012.
 Increasingly more price-competitive market in both retail and wholesale markets.
 Company obligations and liabilities from old business unit spin-offs.
 Balance sheet -- company more leveraged than competitors within the industry.
S.W.O.T. Analysis-Weaknesses

 AT&T plans to pursue initiatives that will expand their wireless spectrum. By continuing to aggressively
expand their spectrum they will be able to reach more people and therefore grow their customer base.
 AT&T has the opportunity to invest in growing and enhancing their wireless and wireline IP broadband
networks. This would allow them to keep up with customer demand for high-speed Internet access and
new mobile, applications and cloud services.
 By increasing their cloud offerings they can expand their market share in the growing cloud computing
market. This is a market that is expected to generate 420 billion by 2017.
 Further industry consolidation (acquisitions).
 Wireless growth, particularly through its partnership with Apple/iPhone.
 Emerging markets/global expansion.
 Further industry growth with 4G technology.
S.W.O.T. Analysis-Opportunities

 There is fierce competition with other wireless providers. The U.S. phone market has become nearly
saturated. Over 97% of the U.S. population lives in an area with at least three mobile telephone
operators.
 Increasingly ferocious competition in the wireless arena.
 Emerging technologies -- falling behind smaller, more nimble companies and operators.
 Price competition within industry pressuring margins.
 Weather damage to antennas and transmission lines.
 Reliance on iPhone gives Apple an upper hand in brand visibility.
S.W.O.T. Analysis-Threats

Strategy Analysis
1 MASTER
STRATEGY
 Low Cost: AT&T is
adequate in this regard and
offer competetive pricing to
numerous services it offers.
 Differentiation: AT&T‘s
exclusive agreementto market
and sell iPhone utilizationof its
vast spectrumto offer video
conferencing service
5 PEOPLE
STRATEGY
 AT&T expends a significant
amount of resources to create
several major programs
versed in Leadership,
Management and Business
Learning:
 Leadership Development
Program (LDP)
 IT MATREX (Management
Transition Exchange)
 The Financial Leadership
Program (FLP)
3 OPERATIONAL
STRATEGY
 AT&T has developed an
MSOC (Management System
Operational Control) process
to ensure efficient reaction
times to customer care and
the demands of the system
performance.
2 MARKETING
STRATEGY
 Geographic Coverage
 Mix Intensity
 Channel Exposure
 Switching Costs
 Branding/Promotion
4
TECHNOLOGY
STRATEGY
 AT&T can leverage a
significant amount towards is
data services in Enhanced
GPRS (EDGE) and its High-
Speed Downlink Packet Access
(HSDPA)
The Master Strategy for AT&T wireless is to be the only telecom provider their customer would ever need by
connecting its customers anywhere – anyway.

Strategy Themes
 Generate Growth Through Innovation.
 Enhance Customer Experience.
 Create Operational Excellence.
 Sustainability

AMERICAN TELEPHONE AND TELEGRAPH COMPANY'S BALANCED SCORECARD
Critical Success Factors Objective Measure Target Initiative
Financial
Revenue growth Annual growth in sales + 15% fiscal year end
2015
New products/services
Reduce Costs Market share by region New customers
Markets and customers - 15% fiscal year end
2015
Pricing strategy
Cost of production Improve product mix
Annual expenses Increase revenue productivity
Reduce operating expenses
Customer
Market share Customer retention Reduce agent
turnover by 20%
end of fiscal 2015
Retain current sales agents
New customers
Maintain relationships with customers,
suppliers, and
distributors
Product/service offerings
Brand image and reputation
Internal Process
Innovation Customer needs 2 new products
fiscal year end 2016
Cross-departmental sharing
of informationNew products
Learning and Growth
Employee Employee turnover - 30% fiscal year
end 2015
Access to training materials
retention Access to sufficient information
Build relationships with employees
Balanced Score Card

Critical success factors (CSF)
CSF
Revenue
Growth
Costs
Reduction
Market
Share
Innovation
Employee
Retention

Critical Success Factors (CSF)
Revenue Growth is important to AT&T because it is indicative of how fast the company is growing or
expanding. It shows the annual increase or decrease in sales growth. Revenue growth is also a performance measure
that investors use to value the company. A continually growth in revenue means that AT&T’s net income will also grow
proportionately to revenue growth.
Cost Reductionfor AT& T will help stabilize or increase cash flow. Cash flow is a very important asset
because it shows resources and uses of the company’s cash. It is also a measure to identify cash deficits and
opportunities. And it is useful in decision making as it relates to the profitability of the company, the company’s financial
condition, and how well the company is using its resources. AT&T’s reduction of costs directly impacts cash flow and will
help the company determine its working capital requirements.
Market share is important to AT&T because it shows the percentage of the market that it holds, and it
shows how well its products are being received in different regions. Market share also helps in determining consumer
demand. By determining consumer demand, new consumer needs are identified which enables AT&T discover
opportunities to fill new needs of consumers, and acquire more market share.

Critical Success Factors (CSF)
Innovationis important to AT&T because the telecommunications industry is very competitive with
opportunities for global expansion. Because of advanced technology, consumers are demanding new features,
better services, and lower prices. Revenue growth is dependent on sales; therefore AT&T must create value for
customers by creating new products and increasing or amending product lines and services.
Employee retention is vital to AT&T because it lowers expenses, helps attract quality new hires,
and it enhances productivity and employee morale. High employee turnover increases recruitment and training
expenses of the company. Employee retention also boosts the image and brand of the company

Key Performance Indicators (KPI)

AT&T Strategic Analysis

More Related Content

What's hot

Viewers also liked

Similar to AT&T Strategic Analysis

Recently uploaded

AT&T Strategic Analysis