AT&T is a wireless communication provider service that was founded by Alexander Graham Bell in 1867. The company has secured the first spot in terms of revenue generation in the communication services. The company has proved its abilities in optical communication services. The success of the firm lies in its ever-going innovative approach to communication and network services. The acquisition of Bellsouth Corporation has enabled the company to become the largest telecommunication provider across the USA. The operations of the company are divided into four major areas: wireless services, including the internet, as well, like mobile phones. The company’s section for the advertisement handles the printing market. Voice products in the wireless division to provide local or international services. The Analysis reveals that the company is facing an aggressively competitive market where rivals such as T-Mobile or Verizon and more are giving rough and tough times. This Analysis helps AT&T in analyzing the working environment to improve the company’s business.
Buyers’ Bargain Power
The company has to revise its pricing policy as the customers are demanding more quality and cheap rates. AT&T has to revise its pricing policy which may reduce its profitability in the long run. The company’s small but powerful customer base is not easy to satiate. AT&T is introducing new policies of discounted rates, offers, and discounts to keep them happy. Therefore, the company faces a strong force of bargaining power from customers. AT&T keeps on innovating new products to expand its customer base and retain its existing clientage.
Suppliers’ Bargain Power
The transmission lines are necessary for providing services, whether wireless or landline, to the customers. The wireless services are provided via transmission towers, and the landline services need a network of copper wires. Alcatel-Lucent, besides Ericson, is the main supplier of equipment to the company. Thereby, the company benefits from this strategic alliance. These suppliers provide quality raw materials to the company and, therefore, exert a moderate force over the company.
Entrants’ Threat over AT&T
The company had the patent in the early days of its business operation. However, with the passage of time, these patents expired, and the company faced a number of rival and competitive threats. Around 6000 rivals entered the market. However, the initial cost to set up business operations and functionality is very high. The network infrastructure is expensive to build. Moreover, the market is highly saturated at 91%, which makes it difficult for novel entrants to generate revenue in the telecommunication industry.
Product Substitutional Threat
The present age has given multiple ways and methods to communication services. This intensified availability of service providers makes it more competitive. The company has to focus more on service than on products. The alternative competitive services to wireless communications are landline telephones. Other voice services like WhatsApp, Skype, etc., have further aggravated this threat. Consumers have active internet connections and use other communication services.
Prevailing Companies Rivalry
The intense competition in the market has made the telecommunication sector more saturated. Rival companies like T-Mobile, Sprint, and Verizon, among others, have intensified the competition. The company needs a shrewd strategic formulation so that AT&T may increase its customer base in the prevalent market. It must quest to expand its operations of the business in order to increase the potential customers in the competitive market. This can help the company to increase its market value, share, and revenue. The company must adopt an acquisition and merger policy to smooth out the aggressive competition in the market.
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