The bulk masses living in the USA make it an extensive market for the telecommunication industry. Communication services are used by almost the entire population across the nation. ATA&T founded by Alexander Graham Bell steered the change and evolution of the telecommunication industry. This analysis gives details about the Strengths, Weaknesses, Opportunities, and Threats prevailing in the internal and external business environments of the company.
A brief review of AT&T
American Telephone and Telegraph (AT & T) Company provides services in communications and networks. The company was incorporated in 1983 in the US, and Latin America including Mexico with headquarters in Dallas, Texas. The company has pledged to provide communication and entertainment services. AT&T has given its vision to revolutionize the globe with the best digital and communication experience by providing excellent services in-network, by allowing maximum allocation of human resources to bring an era of automation.
The company has a unique position in telecommunication services as it is one of the oldest as well as the largest telecommunication firms. The company has provided landline and mobile networks as one of the pioneers in the US telecom sector. AT&T has ranked as the top company in terms of subscribers and revenue generation. The company has hit the top with more than 182.56 million subscribers to its wireless services and secured an average of $171.76 billion in revenue. Thereby, ranked first globally by securing maximum users and finances.
AT&T has enormous corporate standing still it is prone to many threats due to its weaknesses. The strengths and thereby, opportunities are also covered in detail in the given section.
STRENGTHS OF AT&T
AT&T has certain strengths that help the company to cope with the rising market trends and capture the customer base and revenues. These strengths allow the company to enter the novel markets and conduct business operations there.
Global Giant
The largest company in the communication and networking industry has capacitated it to enter new markets and grow its business. The company acquired DIRECTV by consuming about $50 billion in 2015 and achieved the status of the biggest TV subscription provider. Globally, the company falls 14th in the list of the companies with the highest brand value. Thereby, the company expands its business operations and diversifies its services by this. The four main business sectors are communications, Xandr, WarnerMedia, and Latin America. The communication sector is the major revenue producer with 70% of revenue generated from these services.
Vigorous Infrastructures
The next significant strength of the company is its strong infrastructure. The telecommunication industry is prone to expensive infrastructural costs. The radio and base stations consume a lot of money for setting up and maintaining them. Moreover, the company can provide superior wireless and broadband internet services with LTE and 4G coverage technologies. The company’s strong infrastructural base enables it to expand its provision of 5G technology across the mammoths of the population. This strength enables it to steer the telecommunication industry.
Wide-Ranged Data Services
The company successfully covered the data spheres of the digital world. The strongest LTE coverage by the company across the United States along with its quest to provide 5G to its customers. Other companies including T-Mobile and Verizon intensified the competition. Moreover, the company has planned to improve its internet provisions by enhancing IP-based technologies.
Shrewd Marketing Policy
AT&T has been known for its shrewd marketing policy to introduce their products and services in the market. The company uses segmented policies based on psychographic and demographic factors to effectively market its products.
Skilled and Expert Workforce
Another core strength responsible for the success of the company is its expert workforce. The company employs around 230,000 personnel and undergoes human resource management and training programs. The investment in the improvement of the workforce by setting many upskilling and training programs. Therefore, the company has been able to develop an expert workforce with the best skills to sustain the operations of the company effectively.
Mergers and Acquisitions
The company has devised smart policies for mergers and acquisitions. This strategy has enabled the firm to dually benefit itself. For instance, the acquisition of DIRECTTV gave the company a great market share and revenue in pay-tv. In the same way, the acquisition of Warner Media has strengthened the company’s position in video streaming. The company realized these policies due to its strong financial bases and long-term vision of growth and penetration into digital and technological eras.
WEAKNESSES IN AT&T
Feeble Demand Anticipation
The company has not shown much anticipation in terms of the exploitation of opportunities. The weak forecast of demand has upset many services of the company. AT&T has proved itself lethargic rather than being a proactive company. The efficient demand forecast reduces the allocation of resources by exactly defining the needs and reducing the cost thereby.
Restricted Flexibility
The company has been seen as vulnerable to rigidity in its structure. Telecommunications is a volatile business with changing trends and technology. The small-scale industries are more responsive to these changes as compared to AT&T. Therefore, the company’s rigid and complex structure does not address these dynamic situations.
Rising Debt
The company has taken a huge amount of loans to pay for the acquisitions and mergers. Therefore, it can get trapped in the vicious debt cycle. Moreover, AT&T’s EBITDA is stagnant in terms of growth and advancement. It must address this weakness, or the company will find a strained balance sheet. Consequently, AT&T could find it difficult to retain its leading position in the long run.
Extraordinary rates of Attrition
AT&T has an enormous workforce. It is difficult to maintain the satisfaction level of every worker. However, the company’s high rates of attrition are causing it more financial costs. The retaining of new workers and expenses on their skills and development are also costly. Therefore, the company must address this issue by devising wise policies for employment.
Limited R&D investments
Technology industries are investing more in research and development as this is the core requirement in technology businesses. The company has invested in it but failed to achieve the expected results. Other companies like Verizon and T-Mobile are competing with AT&T in this particular development. These companies have leapfrogged AT&T in the 5G rollout. Therefore, it must take R&D priority to address the tech revolutions and innovations.
OPPORTUNITIES FOR AT&T
Global Expansion
The company is currently providing services in the American market. The market in the US is already saturated enough to give the firm massive growth opportunities. However, developing markets still have opportunities for expansion and growth. With a great deal of experience and resources, AT&T can venture into new markets to grow its customer base and resources.
Internet and Cloud Computing Space
AT&T is a giant in telecommunications; however, the company must not rely solely on voice connectivity services. The world has shown revolutionary changes since the technological innovations, especially the penetration of the internet. Therefore, AT&T should venture into cloud computing and related services. It should devise a way to provide services in the technology industry along with telecommunications. AT&T’s strong customer base and resources can help it to gain an extra advantage.
Eco-Friendly Shift
The trends of environmental sustainability and green solutions are penetrating the tech businesses. Big companies like Google or Facebook have already deployed green solutions in their operations. AT&T while expanding globally, must take eco-friendly policies to sustain long-term credibility and brand recognition.
THREATS PREVALENT TO AT&T
Intensifying Competition
Many new corporations have entered the business of telecommunications. Along with the big companies like T-Mobile and Verizon, small-scale companies are also paving their way in the telecommunication industry. The customer-friendly and flexible policies of these companies are capturing AT&T’s clientage. Therefore, it must take a course to expand globally as the American market is already diluted by competition.
Price Wars
The companies have taken drastic measures to ensure continuity and growth of their businesses due to the increased saturation of the market. The telecommunication companies are engaged in price wars thereby. The reduced costs of their services and packages have lowered the overall prices of their products in the market. The increased wars over customer retention by lowering the prices have caused instability in revenue and growth.
Economic Recessions
The recessions in the US economy are not a new phenomenon. However, the company has not learned a lesson. The sole dependence on the American market has inflicted damage on the company’s economy as well. The reduced power of customers to spend and the shrinkage in the overall economy and growth have forced AT&T to limit its operations and workforce.
These threats can contribute to lowering the operations, growth, resources, and customer base of the company. AT&T must devise a policy to mitigate these effects for the long-term growth and development of the business.
Bottom line
- The telecommunication industry is very volatile in nature. The increasing competitors in an already saturated market pose serious threats to AT&T’s business.
- Verizon, T-Mobile, and AT&T are operating more or less on the same scale. The company must ensure the exploitation of global markets to retain its leading position in the long run.
- The acquisitions though have helped the company to explore the market in depth.
- The company has shown resistance to the COVID-19 pandemic. However, the overall economic recession affected the company as well.
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