External and Internal Environments - Assignment Example

 External and Internal Environments Introduction The report is based on the evaluation of the internal and external environment of AT&T telecommunication. AT&T is one of the leading organizations of the US telecommunication market. The organization holds the position of second largest telecommunication providers in the US. AT&T was founded by Alexander Graham Bell in 1875. It is headquartered in Dallas, Texas (Marketline, 2015). The report has elaborated the influence of general environment on the business process and the efficiency of the organization to deal with the external forces. The study has further discussed the different strategies followed by the organization to utilize their strength and opportunities and eliminate their threats and weaknesses. The final discussion of this report is based on the analysis of its value chain with the help of the resource, capabilities and core competencies. PESTEL analysis Different external environment such as political, economical, legal, social, technological and environmental factors have an important effect on the business decisions of AT&T. The economical and technological factors play the most influential role in the business decision of AT&T (Crandall, 2000). Economical High inflation and interest rates are affecting the overall growth of the economy of the US. Different players of the telecommunication industry are reporting decline in the profit margin due to the increase in competition and higher interest rate. The increase in disposable income is allowing the consumers to seek for better telecommunication facilities to match their fast life. The increasing demand of customers is directly affecting competition within the telecommunication leaders of US market. The different economical trends and currency rates of all the partner countries has affected the business decision of the organization. AT&T needs to have different market strategies as per the economical differences of all the outsourced countries (Crandall, 2000). Technological The rapid growth of technology has an extensive impact on the business decisions of the telecommunication industry. Most of the organizations are investing to improve their research and development facilities to offer the latest technologies to their customers. The maturity of technology is also affecting the business decisions of this industry. Most of the technological developments are facing maturity stage very fast due to the introduction of more innovative facilities. The organisation also needs to focus on the global technological trends to sustain their global customers. AT&T has introduced the 4G facility to attract the tech savvy consumers. AT&T is the leading organization to offer Voice over IP (VoIP) which serves as an alternative communication network (Crandall, 2000). Effect of other external factors Different trade restrictions and tariff regulation imposed by the government of various countries affects the business strategies of the organization. A number of consumer lawsuits regarding the adverse health effect caused by the wireless phones and radio frequency are affecting the US telecom industry. AT&T is spending a huge amount to challenge these legal barriers (Marketline, 2015). The consumer’s are more inclined towards the usage of wireless phones while the popularity of landline phones is decreasing gradually. Therefore, AT&T is shifting their focus towards the wireless and mobile services to increase their profit ratio (Marketline, 2015). The awareness about the environmental effects of technologically advanced products is increasing among consumers. Therefore, the organization is rigorously working on the innovation of environment friendly products to reduce carbon emission and meet the customer demand (Marketline, 2015). Porter five force analysis The threat of new entrant is moderately low for AT&T. Most of the leading telecom companies are very well established and have a global presence. Any new entrant will require a significant amount of capital to accrue a competitive position in the market (Florida Public Service Commission, 2012). The pressure of substitute is significantly low. The US telecommunication industry is already offering huge varieties of products and services to their customers. The current substitutes such as social media sites and social networking tools are not very diversified yet (Florida Public Service Commission, 2012). The bargaining power of consumers is very high in the telecommunication market. The leading players of the industry are competing to attract consumers by providing lucrative deals and offers (Florida Public Service Commission, 2012). The bargaining power of suppliers is very high as the availability of suppliers is decreasing. The rivalry intensity in the current market is very high due to the presence of different competitors and less differentiation in the offered services (Florida Public Service Commission, 2012). Most significant forces of AT&T The most significant forces for AT&T are the bargaining power of the buyers and the intensity of the existing rivalry. The past activities to address the bargaining power of consumers: The availability of a huge number of competitors influences the bargaining power of customers (AT&T Inc., 2013). AT&T has focused on the evaluation of different technological advances to reduce the competition and to attract a large number of buyers. The organization has invested sufficiently and frequently to update their research and development department so that they can provide the best facilities to their consumers. The organization provides the largest network of Wi-Fi in the US market. They are continuously monitoring their innovations to be the fastest broadband service provider across the globe (AT&T Inc., 2013). AT&T is adopting all the new technological facilities for the mobile services to attract the consumers of wireless products (AT&T Inc., 2013). The future activities: The organization need to focus on their after sales services to sustain their customer loyalty. Their customer service procedures need to be improved to provide fastest response to the consumers. The organization needs to introduce multi-lingual customer service facilities for their global consumers. They need to focus on the recruitment of customer service executive with strong technical knowledge. AT&T must introduce different discount schemes to attract consumers. This will help them to reduce the brand switching tendency of the consumers. Their marketing department should introduce loyalty card facilities to their customers. Past activities to reduce the intensity of rivalry: The organization has focused on the advertisement procedure through various mediums to increase the visibility of the brand. They have also organized different promotional campaigns to attract the attention of consumers (AT&T Inc., 2011). AT&T has created a strong relationship with the leading players of telephone and internet device market to ensure the increase in their sales ratio. They have merged with different promotional ventures of leading organization selling telephone and wireless devices. This initiative is helping them to enhance the usage of their services under the cover of those leading brands (AT&T Inc., 2011). Future Activities: The organization also needs to promote the environment friendly ventures to create a strong position in the market. The organization need to focus on the penetration of the global market. The US market is getting saturated due to the availability of a huge number of competitors who are offering similar products. So, the organization needs to enter into the unexplored zone to increase their competitive advantages. The organization can also beat the saturation by introducing new product line such as mobile phone and internet devices under the brand name of AT&T. Threats and opportunities Opportunities The demand of wireless voice services is increasing in the developing countries. The growth in the sales of smart phones due to the current demand of Apple products (AT&T Intellectual Property, 2013). Increase in the demand of 4G network among consumers. Various opportunities of international expansion and industry acquisition (Kovacs, 2013). Threat Economic slowdown and saturation of the US market. Government regulation and restriction over the issues of IP relay. The competition over price and promotion among the leading brands of the industry (Kovacs, 2013). Role of AT&T to deal with the threat and opportunities The most serious threats for AT&T are the economic slowdown, market saturation and competitive pricing of rivals. On the other hand, the current demand of market has provided them the opportunity to introduce new products and services (Prieto-Muñoz, 2012). To introduce effective business strategies, the organization needs to coordinate the activities of their business units to increase their competitive advantages. They need to concentrate on their product development procedure and new market acquisition strategies. AT&T needs to introduce new range of services for smart phone users to capture the demand of the current market. The organization must focus on exploring new geographical areas to eliminate the effect of saturation in their niche market. AT&T should provide the 4G services in a competitive pricing so that they can attract a huge number of customers towards their products. The organization needs to adopt the updated technologies of wireless voice processes to secure the leading position in the market. Strength and weaknesses Strength Wide range of products and services which includes wireless services, 4G, VoIP etc. The association of wireless services of AT&T with the latest models of Apple iPhones. Strong global presence through the acquisition of other telecom companies. AT&T is the provider of fastest broadband services in the US (AT&T Intellectual Property, 2013). Weaknesses The competitive telecommunication segment is causing limited market share for the organization. Presently, the organization is facing various issues regarding network security. The wireless voice business of the organization witnessing a sharp decline (Prieto-Muñoz, 2012). Strategies to increase the advantages of strength The organization needs to utilize innovative promotional strategies to increase the visibility and demand of their product lines. The promotional strategies must include advertisement through different channels, press conferences, trade shows and public campaigns. AT&T needs to demonstrate excellent performances through their tie-up with Apple iPhones. The organization can utilize the popularity of the tie-ups to increase their business ventures with other leading smartphone and wireless phone providers. Strategies to fix the most significant weaknesses The organization needs to increase their efforts to improve the network security facilities. They need to invest in the research and development facilities to introduce innovative solutions to the current network issues. AT&T should introduce new product line to attract new segment of customers. This strategy will help them to reduce the market saturation and increase the market share. The organization also needs to adopt competitive pricing policy for their well-established products to increase the consumer loyalty. Resources, capabilities and core competencies Resources: Near about 1,300 world best engineers and scientists. Strong financial condition. .AT&T possesses all the advanced technological facilities to provide excellent services. The well-designed network of cables and satellite to provide the fastest broadband service (Lee, 1999). Capabilities: The organization is capable in providing wide range of cyber securities and cloud based services. The communication department of AT&T is well versed with a different channels of communication (Lee, 1999). Competencies Core competencies of AT&T include integration of different component of software to provide innovative services. Sufficient technological knowledge to meet the requirements of different segments of customers. Incomparable knowledge about network components and vast network management (AT&T Inc, 2014). Innovative Voice over IP (VoIP) services smartphone networking processes (Lee, 1999). Importance of resource, capabilities and competencies in the value chain The resources, capabilities and core competencies of AT&T can improve the different part of their value chain. The most significant part of the value chain of AT&T is their technological development (AT&T Inc, 2014). The availability of award winning scientist and engineers assist the organization to innovate lucrative products for every segment of the global market. The other components of their value chain such as firm infrastructure and operations are influenced by the strong financial position of the organization. AT&T is has the financial strength to invest a huge amount to improve the infrastructure and operation facilities of the organization. The cables and satellite network of AT&T can also provide assistance in modernizing the infrastructure and operations. The demand for exceptional technological and networking knowledge influences the human resources department to improve their selection and recruitment procedures. Their innovative VoIP services, advanced technological facilities and cloud based services can provide a great assistance to their service providing team to deliver innovative facilities to the buyers. Their strong hold in different communication channels helps the organization to strengthen the marketing and sales procedure through rigorous promotions and advertisements. Conclusion The in-depth study of external and internal environment of AT&T has elaborated current economical situation and technological advances of the organization. It has also described the effect of different forces on the business strategies of the organization. The report has enlightened the strength, weaknesses, opportunities and threats of the organization. Therefore, different innovative strategies have been suggested to improve their market condition and competitive advantages. The study has also analyzed the effect of their resources, capabilities and competencies to improve the value chain of the organization. References AT&T Inc, (2014). Integrating Network Infrastructure for Competitive Advantage. Retrieved from https://www.corp.att.com/ap/docs/atnt4.pdf. AT&T Inc., (2011). Getting To The Future First. Retrieved from http://www.att.com/Common/about_us/files/pdf/ar2011_annual_report.pdf. AT&T Inc., (2013). Mobilizing Our World. Retrieved from http://www.att.com/Investor/ATT_Annual/2013/downloads/ar2013_annual_report.pdf. AT&T Intellectual Property, (2013). Mobile Application Development from AT&T. Retrieved from http://www.business.att.com/content/productbrochures/mobile-application-development-product-brief.pdf. Crandall, R. W. (2000). Telecommunications Liberalization: The U.S. Model. Retrieved from http://www.nber.org/chapters/c8489.pdf. Florida Public Service Commission, (2012). Report on the Status of Competition in the Telecommunications Industry. Retrieved from http://www.floridapsc.com/publications/pdf/telecomm/20130722MasterComp.pdf. Kovacs, A. M. (2013). Telecommunications Competition: The Infrastructure-Investment Race. Retrieved from http://internetinnovation.org/images/misc_content/study-telecommunications-competition-09072013.pdf. Lee, H. K. (1999). A Study On Core Competence Management. Retrieved from http://211.253.40.86/mille/service/SAT/10000/IMG/000000004958/t98009.PDF. Marketline, (2015). AT&T Inc.: Company Overview. Retrieved from file:///C:/Users/USER/Downloads/AT&T%20Inc.%20(1).pdf. Prieto-Muñoz, P. (2012). Wireless Telecommunication Industry Overview. Retrieved from http://www.columbia.edu/cu/consultingclub/Resources/Telecommunications_Pablo_PrietoMunoz.pdf. Read More