Organizational Restructuring, Changes in Strategic Management, Deregulation in T-Mobile - Essay Example

TMOBILE Overall managerial health T-Mobile currently seems to have strong managerial health based on its status as an organization that has shown effective planning, proactive organizing, leading within a very competitive market, and controlling; however, there is always room for improvement in management. T-Mobile is a subsidiary of Deutsche Telekom. It uses a global mobile communications network and has future plans to provide expanded Wi-Fi service. T-Mobile is most comparable to Qwest in this comparison in terms of sales, but also shows very strong sales growth, at 50.3%, which is even higher than AT&T; 1-year employee growth was comparable to other companies at around 30% (T-Mobile, 2009). The service sector in the United States that T-Mobile is breaking into has been growing consistently with an urbanizing global market in terms of providing services, and the dependence is necessary to focus upon in terms of putting the consumer first. Management seems to reflect this through strengths of planning for customer service and effective target marketing. T-Mobile management must act in a very dynamic and competitive industry. The United States also occupies a strong position in the services market and has many advantages in this sector because international companies are becoming used to an atmosphere of deregulation that has expanded domestically. This allows corporations to take more advantage of being agents of change in previously regulated industries, in which products and services are now subject to the laws of supply and demand rather than the laws of the government. Therefore the company’s product strategy revolves around the provision of cell-phones and cell-phone services in this competitive environment, with an eye on the future of Wi-Fi, which seems to show effective managerial planning. T-Mobile managers have also shown strengths of organizing in a deregulated market, and adapting to quick changes. Deregulation required that established companies to offer open access to communications channels instead of charging competitors or denying them access, and thus eliminated this entry barrier in the telecommunications industry. In the second barrier, that of cost disadvantages independent of scale, an established company may have proprietary rights to certain technologies which make it difficult or impossible for a competitor to gain a real foothold in the industry. These types of situations can sometimes be handled legally, but this is not cost-effective for the company just starting out in the market. An established competitor could also simply have so much experience in an industry that it is able to outdistance competitors and potential entrants on this virtue alone. T-Mobile occupies a disadvantaged position in comparison to some of its competitors. There are obstacles that T-Mobile must overcome to show more effective management, from a strategic perspective. This is an industry in which there are often sudden, massive mergers, and regulation is therefore poised against an atmosphere in which there is a decreasing number of dominant players. T-Mobile must achieve more management strategic objectives by taking advantage of opportunities in the US mobile market, but challenges and internal weaknesses may call into question the company’s ability to survive as a significant force. T-Moblie may be in the process of being outdistanced because of ineffective strategic planning along the lines of organizing, leading, and controlling change. Managers at T-Mobile can see operations from a strategic management standpoint, based on the core competency of the company and finding this focus. The establishment of core competency as a prerequisite of strategic management decisions is also important for looking at management in general: “Core competence can relate to any of several aspects of its business: expertise in building networks and systems that enable e-commerce; speeding new or next generation products to market; good after-sale service; skills in manufacturing a high-quality product (Thompson and Strickland, 129). T-Mobile managers are faced with a situation in which they must provide an innovative product with popular product features being built through a lot of research and development. This is often not the most cost effective route to strategic management, but on the other hand, it may improve T-Mobile’s speed of response as a company, and its agility when it comes to responding to market trends and competition within the telecommunications industry. A lot of adaptation can be seen in customer-centric response paradigms. Recommendations Looking towards planning, organizing, leading, and controlling at T-Mobile, I recommend that strategic management focuses on product, pricing, promotion, and distribution strategies. In terms of both product and distribution, it may be wise for the company to continue its plan and form strategic alliances with existing companies in the sector. The company may find that even an established player in the industry is limited by their inability to fulfill their distribution needs and reach the customer effectively without such alliances. In terms of promotion and pricing strategies that are part of the marketing mix affected by external factors of competition inherently, the company will most likely want to price in a way that offers substantial incentive for customers to overcome switching costs and move from one of the major suppliers or industry leaders to the new company. Promotions will be a vital part of this strategy, in terms of formulating discount plans and options which will draw customers away from leaders like Cingular/AT&T Wireless and towards new technologies represented by Sprint/Nextel. Technology markets are often very unstable and volatile. As can be seen, this can be a problem as well for companies that are not working in teams enough and showing effective leadership. I also recommend that discounts should also be offered during the company’s initial expansion into new markets to familiarize customers and stress product and customer loyalty; after this, prestige pricing can take effect. Offering the latest product and service features for cell-phones. The impact on the external pricing environment is nascent, since the main signal area is out of the local company’s control. “Mobile (phone) marketing is a 'pull' medium, as opposed to a 'push' medium, in that it can pull a call to action and create a dialog—unlike radio or TV, which is one-way and tries to push you into an action” (Primesburger, 2005). Overall the company will take a strategy of penetration pricing during the introduction of the product, which will move to prestige pricing further down the PLC, assuming that the proprietary technology of the company remains so and other companies are not offering substitute products of a similar nature for less money. This may mean the solution of becoming a more active part of the dynamic present envrionment in terms of policymaking alternatives which focus on the feedback of stakeholders, rather than focusing the policy directions of the company entirely on management decisions. Coming from the above mentioned and initial perspective of core competency, one can also assess the strategy of possessing first mover advantage. “While a core competence is something a company does well internally, what makes it a core competence, as opposed to just a competence, is that it is central to a company’s competitiveness and profitability rather than peripheral” (Thompson and Strickland, 128). First mover advantage is also about centralizing the organization of management decisions, and is another factor that managers need to consider in a dynamic environment. In the external environment that affects the industry of telecommunications and wireless services such as those provided by T-Mobile, organizational restructuring, changes in strategic management, deregulation, and external market conditions have all had a profound impact on the way management of companies as well as employees are working in a competitive and dynamic environment in which change has become more and more of a constant. Organizations are more and more called upon to question and realign structural paradigms to maximize profit, success, customer satisfaction, and employee loyalty in a balanced way that still reflects change in the external environment. When planning, organizing, leading, and controlling, managers at T-Mobile need to realize the dynamism of their environment, in order to meet the challenge of the future and bring T-Mobile from a runner-up in the US market, to one that can achieve more positive positioning. The gap between T-Mobile and its competitors can be bridged by fervent dynamism reflective of the external environment. REFERENCE Primesburger, C. (2005). Weighing the Tolerance for Mobile Phone Marketing. PC Magazine. Thompson, A.A., and A.J. Strickland (1997). Strategic Management. New York: McGraw-Hill. T-Mobile SEC Filings; Quarterly report; Stockholder options (2009). Hoovers. http://www.hoovers.com Read More