Sprint Communications Vision - Term Paper Example

Introduction Sprint Communications, established in 1991, provides technological solutions to its customers, mostly businesses (both large and small) (Sprint). The clientele manage their own core businesses, while Sprint Communications assists them in the technological arena. The company’s red logo depicts the efforts and successes of its predecessors, including Centel, US Sprint and United Telecommunications. The company follows aggressive strategies as far as growth is concerned and offers a diverse range of products. In 1880’s the company became the leader in telecommunications sector and for the first time in U.S, provided a 100% fiber optic cable network; a service that was unimaginable previously (Sprint). The merger of Sprint and Centel in 1993 gave the company an edge by providing wireless communication packages across long distances (Sprint). Company Founder and Vision The company was founded by Cleyson Brown in 1991 (Sprint). The company is centered on four main principles: integrity, honesty, creativity and commitment. The company’s mission is to create sustainable partnerships with customers on a long term basis, based on trust and collaboration. There are four central tenets of its mission. Firstly, to provide high quality, out of the box solutions for customers to provide them with cutting edge technology (Sprint). Secondly, it provides strong communications platforms to enable customers to deal with day to day networking issues (Sprint). Thirdly, it is responsible for accounting for managers who are loyal to the business and who truly understand the needs of the businesses and align their personal needs with those of the business (Sprint). Fourth, providing highly responsive and interaction based service on a localized basis which is capable of being trusted and guaranteed to give ultimate peace of mind to the customer (Sprint). Empowerment The company has gone at lengths to ensure empowerment of not only its employees, but the community in general. It has a plan under the banner of “inclusion and diversity” which addresses the issue of corporate citizenship and allows minorities and ethnic groups an equal share in the operations of the company (Sprint). The company proudly declares itself as a learning organization and offers merit based advancement of its employees with extensive training programs to ensure their personal as well as professional growth. Under this strategy the company has created “employee resource groups” that comprise of self-directed work teams where constructive discussion and contribution is encouraged. These teams are also continuously benefitting from the advice of their seniors (the executive champions) who provide mentoring and counseling as well. In its efforts to provide Equal Opportunity, the company was recognized by the Hispanics Magazine as among the top 100 companies to work for (Black Enterprise). It further received the “Empowerment” award by Urban League of Kansas City (Sprint). Ethical Behavior and Social Responsibility As far as ethical behavior is concerned, the company has a stringent “Sprint Code of Conduct” that needs to be followed by all managers, employees and stakeholders of Sprint (Sprint). The purpose of this Code of Ethics is to ensure good practice, and foster a character consistent with the company’s mission of which integrity and honesty are the founding pillars. The Code of Conduct allows the company to take ethical decisions and enhances the goodwill of the company in the market. As far as corporate social responsibility (CSR) is concerned, Sprint offers “wireless recycling” and use of renewable energy in its communications along with grants in education (Sprint). In pursuance of its recognition of CSR, Sprint announced its plan for producing environmentally friendly devices in 2007 with the popular Sprint Green Logo (Sprint). The company plans to address CSR at all levels: the customer, employees, community, operations and product offerings. For instance, the company arranged a Sprint Emergency Response Team and promised to offer a $21 million worth network coverage in Alabama in the midst of hurricane fears. The plan was to allow undisrupted communication in the event of a hurricane through its Sat COLTS and COWs technology. For this the company hired technical experts to allow for such systems to work even in times of disaster. The company was also ranked the 6th in the Newsweek Green Rankings of 2010 (Sprint). Summary of Products and/or Services The company offers a diverse range of products and services including mobile, fixed line, telephone systems, telematics, mobile apps, Vodafone net, IT and Web Design (Sprint). The marketing plan is as follows: Marketing Plan Product The company offers a diverse range of product offerings, offering real time connectivity, the cutting edge, state of the art, IDEN technology, and efficient wireless communication packages where the customer has to pay no more than the amount of minutes used (Sprint). Since each product has a different market and since the company uses a segmented marketing strategy, the product specifications vary for each group. Price Prices also tend to vary amongst the vast product offerings of Sprint. The company has an entire section of its website dedicated to the tariffs of various services, including a long-distance pricing plan, Calling Cards, Service packages and taxes. For instance, its prepaid call rates are relatively inexpensive with no monthly fees (Sprint). It offers special rates for long distance calls where the Plan Advisor service is offered to facilitate customers on the pricing of the same. Promotion The company offers diverse promotion ranging from ‘saving cash by going green’, ‘free Samsung phones’ to ‘discounts on Sprint services for employees of eligible organizations ‘and ‘free family locator trial’. Average discount ranges from $37 to $100 (Sprint). Redeemable coupons are also offered. Advertising is done mainly through print and television. Sponsorships are a major promotional tool. For instance, the company sponsored the NASCAR Nextel Cup Series. Owing to its sponsorship of the NASCAR it was entitled to privileges related to advertising, branding, manufacturing and technology (Sprint). Place The company offers vast network coverage, reaching all 50 states of America (Appendix 1). The company has a special dedicated section of Sprint International that deals with complete solutions for corporate clients; from managing their mails, to providing them with cutting edge technology in terms of communication. The company offers web-based stock control and online printing facilities; thus, the international division is largely dedicated to design and print services (Sabri and Shaikh). Industry The industry is a fast –changing one with product obsolescence being the biggest threat. Since technology is always prone to change, Sprint is always under industry pressure to come up with improvements in its technology in terms of cost, quality, speed and delivery. Its main competitors are AT&T Mobility, Cellco Partnership, and T-Mobile. In terms of revenue, the company lags behind AT& T. The company operates in an industry which is vulnerable to several mergers and acquisitions. Verizon acquired MCI; AT&T acquired Bell South in 2006. This has led to consolidation of industry power in the hands of few big companies which can pose threat to the continued existence of Sprint. Furthermore, the wireless communications market is also saturated (about 80% in the U.S) (Data Monitor). This could put the company’s revenues on the backburner as volumes get depressed in a saturated market. The average unit revenue is also declining for the simple reason that there is intense competition in this sector. Also, the rising trend of MVNOs (Mobile Virtual Network Operators) is taking the chunk of market away from telecom operators such as Sprint posing threat to the latter’s existence (Data Monitor). Differentiation of Products/Services The market in which Sprint competes is highly competitive; it competed previously with Nextel which it successfully acquired. The company offers differentiation in terms of ‘industry firsts”. It has pioneered in several products and achieved milestones in this regard. Its cutting edge IDEN technology is truly a core competency of the company which at present is in the domain of Sprint only. None of its competitors have been able to acquire this technology; in fact the company has gone at great lengths to partner with Motorola with respect to its IDEN service. Product/Service Delivery & Distribution The company offers mobile resource management whereby cargo, people, receipts and bills can be tracked from any part of the world, enabling real-time monitoring of communications services. It offers tracking systems through GPS and Mobile Internet. The company also offers communications solutions from one click of the mobile with dedicated services such as Sprint PCS Vision, PDAs and other phones. The 3G network facility offered by Sprint allows quick interaction with Sprint’s suppliers, customers and other stakeholders. The company offers online activation of packages, and Plan Advisors to assist customers with information related to long distance tariffs. Furthermore, a part of the company’s website is entirely dedicated to explaining common customer queries, to the extent that customers can plan their own packages and track how much it will cost them based on their selection of their choice of region. Financial Analysis Analysis of Ratios The company’s Total Debt to Total Equity ratio is 58.13 times (Data Monitor), which is higher than the ideal 50 times. This means the company has more than 50% debt which could lead to insolvency issues. Its current ratio, however, is 1.02 (Data Monitor) which is characterized as efficient (Data Monitor). The company has short cash operating cycle and good working capital management since its current liabilities are well managed. Also, its current assets aren’t too large so as to be characterized as idle. The company’s Quick Ratio is -10.64 (Data Monitor), which is not a very good sign as it indicates shortage of current assets which could lead to problems with liquidity. Investment Opportunities The company offers Return on Equity of -21.18 (Data Monitor), Return on Invested Capital of -6.80 (Data Monitor) and Return on Assets of -4.17 (Data Monitor) which do not make the company lucrative for investment. The return is actually negative; thus, it makes little sense to invest in this company. SWOT Analysis The company has conducted major mergers and acquisitions in the past, reflecting upon the company’s aggressive expansion strategy. The company underwent major milestones in successive years. For instance, in 1975 the company introduced, for the first time in the world, a public data network. In 1986 the company offered what is known as pin drop quality and introduced its long distance communication services (Sprint). In 1978, the world’s first 100% fiber optic cable technology was offered by Sprint for real time communication whereas in 1989, it introduced the first overseas communication network in its history (Sprint). Similarly, in 1992 it became the first global telecom company to offer internet access (Sprint). In 2004, one of the world’s most renowned merger occurred between Sprint and Nextel (a blooming communications network company) (Sprint). The following paragraphs detail Sprint’s strengths, weaknesses, opportunities and threats. Strengths Dominant share in the market: The company ranks third in terms of subscriber base in the wireless communications market in the U.S with its digital services encompassing all 50 states of America. It offers state of the art CDMA technology. The CDMA technology is offered in around 360 markets (Sprint). The company also offers the iDEN technology capitalizing on the core competencies of its affiliate Nextel. The IDEN technology is offered in 355 markets (Sprint). Wireless Services: The company offers wireless services of up to 1.9 GHz PCS which a part of its CDMA network. The company has 10 year PCS licenses. The company also has 2.5 GHz licenses which it shall use in future (Data Monitor). It is also a non-voting member in Spectrum Co which offers wireless licenses of 1.5-2.5 GHz. In 2006, Sprint acquired Velocita in order to obtain a greater share of licenses in the Spectrum brand. The company held $21000 worth of FCC licenses as quoted in its financial statements in 2007 compared to previous $19000 (Data Monitor). Powerful Brands: The company has in its portfolio some of the top performing market brands. The CDMA communications are sold and marketed under “sprint” brand name. It also offers solutions for messaging, videos, imaging, entertainment and other applications under the brand name of Power Vision and offers the high speed internet EV-DO technology (Data Monitor). Under Nextel and Boost, real-time communication services are offered using the iDEN. The Power Source brand also offers CDMA-IDEN technology Post-paid services are offered through Sprint and Nextel whereas prepaid solutions are offered under the umbrella of Boost Mobile. The modes of advertising are largely print and television. Sponsorships are also a common place. For instance, the company sponsored the NASCAR Nextel Cup Series. Owing to its sponsorship of the NASCAR it was entitled to privileges related to advertising, branding, manufacturing and technology. Weaknesses Reliance on Motorola: The company’s existence is greatly tied to that of Motorola. The iDEN wireless technology, on which the company’s digital packet data solutions thrive, is powered by Motorola (Data Monitor). The infrastructure related to IDEN network and IDEN handsets is powered by Motorola. The company also does not demonstrate any intentions of reaching an alternate partner in this regard which could mean putting its eggs in one basket. The company’s long term commitment and partnership with Motorola solely is reflected in its negotiations related to price and other terms of purchase related to the license of IDEN equipment. Despite the fact that the supply terms on handsets are competitive, the cost of these handsets is greatly higher than those that do not offer the IDEN technology. Furthermore, the company’s reconfiguration plan with Spectrum is also strongly tied to Motorola (Data Monitor). Needless to say, if Motorola disrupts its supply to Sprint, it will have no other option which will put it on the brink of failure and lowering its bargaining power. Also, the IDEN technology is not subscribed by many which means the company would have a tough time locating alternate suppliers. Opportunities WiMAX Technology The company has tied hands with Clear wire to enhance is wireless internet services. Clear wire has enormous potential in terms of coverage of 120-140 million people in the U.S. Five big corporations including Google, Intel, Comcast, Time Warner and Bright House Networks have invested an amount worth $3.2 billion in Clear wire (Data Monitor). The expansion of Sprint XOHM Wimax network and the customer base of Clear wire provides an excellent opportunity for Sprint. EV-DO Technology The company’s EV-DO technology has the ability to cater to 209 million people (Data Monitor). Sprint is planning to advance to the next level of this EV-DO technology by rolling it out in its CDMA market. The model called EV-DO Rev A is capable of supporting high performance applications in real time. Threats The company operates in an industry which is vulnerable to several mergers and acquisitions. Verizon acquired MCI; AT&T acquired Bell South in 2006 (Data Monitor). This has led to consolidation of industry power in the hands of few big companies which can pose threat to the continued existence of Sprint. Furthermore, the wireless communications market is also saturated (about 80% in the U.S). This could put the company’s revenues on the backburner as volumes get depressed in a saturated market. The average unit revenue is also declining for the simple reason that there is intense competition in this sector. Also, the rising trend of MVNOs (Mobile Virtual Network Operators) is taking the chunk of market away from telecom operators such as Sprint posing threat to the latter’s existence. Conclusion To conclude, Sprint has a long way to go in a maturing, consolidated and highly competitive industry and for that it needs to struggle its way by coming up with more innovations. The study of this company is particularly interesting as it operates in a technology-intensive sector in the contemporary global business world where technology is the only major source of competitive edge. References Black Enterprise. Black Enterprise 30 July 2000: 120-124. Data Monitor. Sprint Nextel Corporation. New York: Data Monitor, 2010. Sabri, Ehap H. and Salim N. Shaikh. Lean and Agile Value Chain Management: A Guide to the Next Level of Improvement. New Jersey: J.Ross Publishing, 2010. Sprint. Sprint . 20 April 2011. 21 May 2011 . Sprint, 2011. Coverage Check. Available at: [Accessed 21 May 2011]. Appendix 1 Source: Sprint, 2011. Coverage Check Read More