AT&T Corporation’s Competitive Strategy

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Introduction

Studies show that globalization plays a crucial role in defining the operations of organizations around the globe. Firms struggle to provide the best services for their customers in order to maintain a competitive advantage over their competitors. However, it is fundamental that any business organization employs effective strategies so as to compete in the challenging business environment (Bagley & Diane, 2010). Organizations must be able to craft, execute, and implement various strategies by maximizing their opportunities while minimizing their weaknesses (Three Sigma, 2003). This paper is based on the analysis of AT&T Corporation, which is one of the largest telecommunication groups within the United States of America. Therefore, this paper seeks to establish the most effective ways of employing strategies within organizations by conducting an environmental scan on AT&T Corporation.

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Environmental Scan for AT&T Corporation

SWOT Analysis

As much as AT&T has several strengths and opportunities, it also has weaknesses that must be minimized in order to compete favorably. The following table highlights the strengths, weaknesses, opportunities, as well as threats affecting AT&T Corporation.

Favorable Unfavorable
Strengths
  • Strong brand Image
  • Market leader
  • Strong financial backing
Weaknesses
  • Lack of Content
  • Geographical Concentration
Opportunities
  • Acquisitions
  • Expansion of the U-verse fiber network
  • Global investments in other networks.
Threats
  • Intense competition.
  • Saturation in the wireless market
  • Government regulations

Identification of Threats

From the PEST Analysis conducted on AT&T Corporation, the main Political, Environmental, Social, as well as Technological factors affecting the organization have been identified. This section discusses the most significant environmental threats affecting the organization and proposes the best approaches for addressing them so as to minimize their impact.

Competition and Industry Saturation

Recently, there has been an increase in the number of companies operating in the telecommunications industry. Technological advantages have allowed emerging service providers to offer similar services at remarkably lower prices than AT&T (Flack, 2012). Examples of competing services include Facebook, Twitter, Skype, as well as other cheap alternatives. As a result, AT&T has experienced a significant reduction in the growth of its customer database and faces new threats such as losing its loyal clients (Ireland, Robert & Michael, 2008). The organization must then employ new strategies such as introducing night packages, holiday offers, and weekend offers in order to attract new clients, as well as retain existing ones.

Government Regulations

With the current trend in globalization, AT&T must have effective strategies that will improve its global presence. On the contrary, some government regulations both in the United States and foreign countries limit the establishment of new services, as well as branches in certain geographical regions. For example, the government blockage of the T Mobile merger undermined one strategy that would have improved its global presence. Such government regulations limit the growth rate of AT&T. In response, the organization must use effective strategies such as the acquisition of similar companies so as to increase its global presence.

Evaluation of AT&T’s Strengths

The main strengths of AT&T Corporation include its strong brand Image, leading market position, as well as robust financial position (Flack, 2012). From the SWOT Analysis, all these strengths have been identified as the core strengths of the organization; thus, they account for the company’s competitive strategy. Analysis of the company’s core strengths is given below.

Strong Brand Image: AT&T has a strong brand image that is recognized by a majority of its target market. This is a great advantage for the corporation because it sells the company to customers. The brand image of the company can be reinforced by advertising the company to its target market while retaining the good reputation of the organization.

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Leading Market Position: AT&T is the largest broadband provider in the United States and is among the largest telecommunication services providers in the world (Moritz, 2011). This means that the corporation has a large customer database, and the capacity to meet customers’ requirements.

Robust Financial Position: In addition, the corporation has a good financial backing that gives it a competitive advantage over other telecommunication companies.

As established, these are the main strengths that give a competitive advantage to the organization. AT&T can also use its strong financial backing to improve its competitive advantage by acquiring similar firms (Bagley & Diane, 2010). This would increase the corporation’s leverage and increase its competitive advantage. In addition, its strong brand image can be used to sell the company within the United States, as well as in foreign countries.

Competitor Analysis

Besides AT&T, there are several corporations within the United States that compete in the telecommunications industry. The telecommunications industry is highly competitive, and there are several companies that offer stiff competition to AT&T. Some of these companies include Verizon Wireless, Cingular, and Sprint, which are discussed in the following paragraphs.

  • Verizon Wireless: This competitor is the largest supplier of telecommunication products and services, has good coverage, as well as affordable monthly offers (Moritz, 2011). AT&T can maintain its competitive advantage over Verizon by introducing new offers, services, as well as improving its coverage.
  • Sprint: This Company is expected to offer some competition because of cheap service, but currently has an insignificant influence on AT&T’s operations.
  • Cingular: This competitor operates in the United States, but does not offer any roaming services around the globe.

Change Management in Strategic Planning

Change management is crucial in strategic planning because it defines the path that an organization will follow. For instance, a declining economy may influence the approach taken in employing strategy; hence, further modifications on such strategy will be required. For AT&T, the impact of a declining economy can be detrimental if effective modifications are not conducted on the strategy. This is because the purchasing power of the customer is affected; thereby, reducing the overall sales and profitability of corporations (Bagley & Diane, 2010). In response, the company should reduce the prices for its products and services and increase offer periods so as to retain its customers during the financial crisis.

Global Competition and its Impact on AT&T

Several researchers assert that globalization influences how different organizations formulate strategies that help to maintain a competitive edge over others. Globalization resulted from advancement in technology, which allowed for swift movement of ideas from one region to another. As a result, various organizations started offering the best, as well as most affordable goods and services in order to attain a larger market share. This accounts for the high levels of global competition that are offered by multinational corporations. Global competition negatively affects AT&T and must be addressed in order to improve its global competitive advantage. The competition influences the organization because of stiff competition from other corporations having the benefits of economies of scale (Ireland et. al., 2008). Therefore, AT&T must modify its strategies by improving its response time, delivery time, as well as offering exceptional customer care services in order to create a competitive advantage. Additionally, the organization can initiate advertising campaigns in new regions in order to improve its presence in such regions.

Conclusions

AT&T is a telecommunication giant but still requires that effective strategies are used in order to maintain a competitive advantage. In conclusion, the paper has analyzed the competitive advantages of the corporation and established the best methods that can be used for strategy implementation.

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References

Bagley, E., & Diane, S. (2010). Managers and the Legal Environment: Strategies for the 21st Century. New York, NY: Cengage Learning.

Flack, T. (2012). AT&T Connected Communities Provides a Competitive Advantage for Modern Digital Dwellings. Web.

Ireland, D., Robert, H., & Michael, A. H. (2008). Understanding Business Strategy: Concepts & Cases. New York, NY: Cengage Learning.

Moritz, S. (2011). AT&T May be ‘Big Winner’ in New IPhone Battle with Verizon. Web.

Three Sigma: A Competitive Strategy Model. (2003). Web.

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BusinessEssay. 2022. "AT&T Corporation's Competitive Strategy." January 14, 2022. https://business-essay.com/at-and-ampt-corporations-competitive-strategy/.

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