Business-Level and Corporate-Level Strategies example AT&T Inc - Essay Example

? Business-Level and Corporate-Level Strategies Question AT&T Inc. is one of the leading US based multinational telecommunication organization headquartered in Texas. The organization is the largest provider of both fixed telephone and mobile telephone in US. Moreover, it provides the organization provides effective broadband subscription television services. AT&T recognized as the 21st largest global organization in terms of market value. The organization developed a global client base of 243 million subscribers through its effective business level strategy (Hitt & Ireland, 2008). The organization represents the actual market penetration of 82%. In addition, the organization sells mobility of accurate voice and data through significant wireless services. Business Level Strategies of AT&T AT&T is one of the most popular telecommunications brand in global market place. The organization followed unique business level strategy to enhance their business performances. Business level strategy includes cost leadership strategy, differentiation strategy and focus strategy. Implementation of effective business level strategy helped the organization to become one of the strongest global brands within the telecommunication industry. Business level strategy of AT&T has been described below. Cost Leadership strategy The organization focuses on the reduction of business operation cost in order to offer the products to the end customers in a reasonable price. This competitive pricing strategy helped the organization to achieve the leading spot in the US telecommunication industry. For example, the organization provides several effective services, such as Rollover Minutes and Family Unit Plan. The organization reduced the service processing cost to deliver the services in a low price level. Moreover, the organization has implemented several niche marketing strategies. The organization provides, TDMA, UMTS and GSM service in minimal price to their clients. Effective cost leadership strategy helped the organization to develop significant client base. Differentiation Strategy Effective product and service differentiation strategy helped AT&T to meet the market demand and customer satisfaction level. The organization collaborated with Apple Corporation. AT&T started to sell their GSM and Wireless services through the iPhones. The organization is successfully acquiring leading global clients. It is helping them to secure effective market share. Unique accord to the competitive global market place has effectively differentiated the brand from its existing global competitors (Brenton, 2007). Utilization of wide spectrum offers exclusive video conferring service to its target customers. Focus Strategy AT&T is the only telecommunication organization in US that committed effective customer service. The organization has implemented effective niche marketing strategy. People can get linked and connected with each other in any place through the efficient telecommunication and broadband service of AT&T. The organization effectively diversified their business operation in several emerging global markets. AT&T provides HSPDA, Voice PTT, Video Sharing and Voice-IP services to its global customers. In addition, exclusive channel exposure helped AT&T to achieve potential competitive advantages. Question 2 The successful story of AT&T portrays 130 years old history. The giant telecommunication service provider effectively served the US customers through exclusive telecommunication service. From the foundation of AT&T by Graham Bell to the modern era, the global telecommunication industry has astonishingly evidenced various key events of the organization. This part of the study will determine the corporate level strategies of AT&T. Corporate Level Strategies Telephone was introduced by Graham Bell in the year 1875. After the successful establishment, the organization has diversified their business operations in various emerging global market place. AT&T follows vertical integration structure in the organization. This unique organizational structure helped AT&T to create potential opportunities of relocating the corporate skills of the organization. In Addition, the organization also did acquisition of several major licenses. This strategy helped the organization to increase its market power. Slowly and gradually, the organization integrated horizontal organization structure in their vertical structure. Integration of both organizational structure helped AT&T to develop healthy economies of scope. Implementation of know-how technology enhanced several corporate functions of AT&T. Monopolistic status of the organization generated several filed regulation ensembles. One point of time, the existing market share and brand image of AT&T Affected due to intense market competition. This critical situation reduced the ability of the organization to reach every possible client. The organization implemented workplace diversity strategy in order to overcome this situation. Somehow this strategy also has failed. Lastly, the organization developed several key synergies on the diversification’s account. This process helped them to secure their market share. Still AT&T is the major revenue generating organizations, but few in-adequate corporate level strategies provided significant chances to the market competitors to lead a potential part of the competitive market. Question 3 Porter’s five forces model can be utilized in this study to in order to analyze AT&T’s competitive environment. Competitive Environment Analysis through Porter’s Five Force Model Porter’s five forces model helps a researcher to analyze buyer’s bargaining power, supplier’s bargaining power, rivalry among the firms, threat of substitute and threat of new entrants within a particular industry. All the elements of Porter’s five force model are described below. Buyer’s Bargaining Power US telecommunication service industry is highly competitive. Therefore, subscribers can switch over to other service providers in order to get broadband and telecommunication service in low price level. On the other hand, recent financial crisis and global economic recession reduced the purchasing power of people. Low disposable income of people wil forces the subscribers to achieve price effective service plans. Looking into these matters, AT&T implemented competitive pricing strategy for the subscribers. Various cost saving plans has increased the customer preference. After analyzing all the aspects, it can be stated that, threat of bargaining power of the buyers is moderate. Supplier’s Bargaining Power Significant availability of suppliers helped the organization to source raw materials and supply products in limited cost. AT&T chooses cost effective suppliers to cut down and save supply chain operational cost. Therefore, it can be stated that, the threat of supplier’s bargaining power is quite low. Threat of Substitutes The competitors of AT&T have introduced several substitute telecommunication services. The competitors are utilizing advanced technology to provide effective substitute services. Verizon is the potential competitors of AT&T. Verizon grabbed a significant part of the AT&T’s market share through substitute telecommunication services. However, AT&T is maintaining their leading position in the competitive telecommunication service market through effective business level strategies. High switching cost is forcing the potential subscribers to be with AT&T. After analyzing all the facts, it can be stated that the threat of substitute is moderate. Threat of New Entrants AT&T is the leading and traditional telecommunication service provider. The organization has successfully diverged their services and products in several sectors, such as internet, wireless, broadband, mobile phone, land phone, GSM and many more. Moreover, effective pricing strategy increased the loyalty of customers towards the brand. Therefore, it is hard for the new organization to take away the market share of AT&T. In addition; the new organizations may have to face several legal market entry barriers that can affect the business performance of those organizations. AT&T is leading the telecommunication service industry through effective customer loyalty and significant brand image. Therefore, it can be stated, that the threat of new entrants is quite low. Industry Rivalry US telecommunication service provider industry is highly competitive due to the presence of several leading and potential organizations. Several leading global organizations are trying to capitalize on the potential opportunities that are developed due to globalization and technological revolution. AT&T is the leading player within the industry. Verizon is the leading competitors of AT&T in US. Verizon is trying to grab the market share of AT&T through the introduction of substitute telecommunication services. However, AT&T introduced 3G and 4G network services to secure its market share and client base. Moreover, competitive pricing strategy motivates the subscribers to stick with AT&T (Heider, 2012). In addition, effective product diversification strategy helped AT&T to maintain its leading market position for a longer time period. Therefore, it can be stated that, AT&T will survive as the leader within the industry due to effective leadership strategy and innovation process. Question 4 According to the above discussion, it can be stated that AT&T will lie in the fast cycle market. It is known to all that, several leading organizations is diversifying their business processes in order to reduce the threat of intense market competition. After Second World War the market demand and customers needs are dramatically changing due to continuous introduction of various types of products and services. Therefore, the organizations are implementing effective and unique business strategy to secure market share and financial profitability. AT&T is the leading player within the US telecommunication service provider industry. The organization has introduced 3G and 4G network services for the subscribers to reduce the threat of substitute services. In addition, the organization is continuously diversifying their business operations in emerging global market places. AT&T implemented competitive pricing strategy in order to target price sensitive customers. This competitive pricing strategy helped the organization to achieve several potential competitive advantages. These business activities are the characteristics of fast-cycle market strategies. Effective and rapid business diversification strategy helped the organization to maintain its leading business position. References Brenton, P. (2007). Watching More than the Discovery Channel. New York: Springer. Heider, D. (2012). External Technology Commercialization in Diversified firms in the context of the Open Innovation Paradigm. Berlin: GRIN Verlag. Hitt, M., & Ireland, R. (2008). Competing for Advantage. Stamford: Cengage Learning. Read More