Summary: Investigate and Analyze the Company’s History and Growth
AT&T is an American company formed in 1983. Since its formation, the company has been one of the market leaders when it comes to offering telephone services in the United States. In terms of customer volume, the company is the second largest communication company with an estimated 81.6 million subscribers and users. Furthermore, globally, AT&T is one of the leading telecommunication provider as it offers its basic services in 215 countries around the world (AT&T, 2015). The company was able to grow into the digital age and provide customers with digital services such as internet services, SMS, and voice plans. The company is structured such that the services it offers to consumers are divided into four. These include wireless, wireline, others and advertising and publishing. Over the years, the company has continued to experience excellent growth in its industry because of increased profits and customer subscriptions. In particular, the company saw increased profits and revenue in the wireless segment. Based on the data provided in the case, it is clear that the wireless segment experienced a 53.9% and 58.4% increase in income from 2006 to 2007 and 2007 to 2008 respectively. It is expected that this growth is supposed to continue as customer numbers increase (Vaughan, Mitchell & Michael, 2012).
Analysis on the External Environment
AT&T is involved in a highly competitive industry where numerous external factors that affect the business. The first external factor is competition within the industry. The telecommunication industry is highly competitive with service providers offering innovative products aimed at attracting customers. The bargaining power of customers in the industry is also high hence; they can easily influence the price of the products the company offers. Lastly, the threat of substitutes is also high since there are numerous product plans available within the telecommunication industry that consumers can choose. The table below summarizes the SWOT analysis of AT&T identifying the company’s strengths, weaknesses, opportunities, and threats.
Value creating functions:
AT&T creates value by providing its customers with the best quality services at the most affordable prices. The company creates value by offering subscribers excellent bundled products that reduce the overall cost of users (AT&T, 2015).
Recommendations
In order to be able to determine the cost of sending a text message, it is recommended that the key cost drivers in the sending and receiving of text messages be determined. The main cost drivers are the cost of communication equipment, the volume of messages, the length of the messages sent by customers, and the use of a location and billing database (Vaughan, Mitchell & Michael, 2012). Articulate an Action Plan
In order to be able to determine all the key cost drivers when it comes to the pricing of text messages the action plan below is recommended.
Conclusion
In conclusion, the telecommunication industry is highly competitive with each company offering customers attractive and differentiated products. It is also evident from the case study that several cost drivers associated with offering customers services. Most of the cost drivers cannot be easily quantifiable; however, using data from service providers will be most straightforward way of determining the cost of sending a text.
References
Vaughan R., Mitchell S., & Michael L., (2012) AT&T Wireless: Text Messaging, Richard Ivey School of Business
AT&T. (2015). AT&T Company Information. Retrieved July 7, 2015, from http://www.att.com/gen/investor-relations?pid=5711
AT&T. (2015). Customer Services. Retrieved July 7, 2015, from http://www.att.com/gen/investor-relations?pid=5711
AT&T. (2015). Networks. Retrieved July 7, 2015, from http://www.att.com/gen/investor-relations?pid=5711
AT&T. (2015). Industry Awards and Recognition. Retrieved July 7, 2015, from http://www.att.com/gen/investor-relations?pid=5711
AT&T. (2015). Small Business Services. Retrieved July 7, 2015, from http://www.att.com/gen/investor-relations?pid=5711
