Introduction
Preliminary strategic audit refers to assess the current performance of the operations of the business. It examines that if the functions of organization are moving in the designed direction that is set to achieve specific goal or objectives. AT&T is a multinational company that provides effective communication products and services to its global customers. Its product includes smartphones, tablets, and broadband services that are widely used by the customers all over the world. The mission and vision of the company is to provide technological and innovative products to its valuable customers and ensures high satisfaction in the world market. The network of AT&T is strong that also ensures high market share. It also has high brand recognition in the local and international markets.
The value proposition of AT&T relates to providing effective and reliable services to connect the people in the digital era. The use of technology to fasten the internet services and ease to use for the travelers is the primary objective of the company. AT&T is investing in the technology to improve its product reliability and service efficiency to facilitate the customers at large. It provides smartphones, tablets, and other internet related products by analyzing the need of internet in the modern era. Nowadays, almost all the work is done on internet and people are willing to be online all the time. Although the products and services provided by AT&T are reliable and sustainable in satisfying the customer needs, it intends to make continuous improvement by utilizing various resources and adoption of advanced technologies for the development of existing products and introducing new products and services in the emerging markets .
The market position of AT&T is strong as it [produces the products and services according to the preferences of customers. The users of the products of the company expect more from the company as it also offers services prior to the purchase of products or services and after experiencing it. The marketing team realizes and collects information through primary research to identify the preferences, views, and suggestions from customers who purchase such products and avail facilities provided by AT&T. The main focus of AT&T is on the wireless services that are provided to ensure customer loyalty and their retention for repurchasing the product or services. The brand of the company has high recognition in the international market so it intends improve its operations of business and satisfy the customers at large .
The telecommunication market has shown growth due to the increasing competition and as a result the quality and pricing of the internet related products has become affordable and reasonable for the customers. The competition is based on the rapid adoption of technology and producing high-quality innovative product at relatively low price. AT&T intends to gain competitive advantage so it has improved wireless services and set the price according to the competition in the market. The reason for preparing pricing strategy and strengthen the operations of business is to compete in the local and international market and ensure high sustainable market share in the industry .
External Environment Analysis
The environmental analysis is essential to analyze the conditions of the market and industry in which the company is providing its products and services. AT&T operates in highly competitive market where there are various factors that put direct impact on the business of the company. AT&T has low threats of new entrants due to high customer loyalty and brand recognition in the market. The new entrants cannot put direct impact on the business of the company due to its efficient control over operations of business. The threat may create on account of pricing and pre-emptive deterrence that can put adverse effect on the company profitability and long-term sustainability. In short, the company needs to assess the performance at least quarterly to ensure that it is satisfying all of its stakeholders extensively. Availability of substitutes is one of the major factors that can impact the business of the company. The substitutes of the product of AT&T are available in the market and it is expected that the customers will switch to other products due to low cost of switching. However, the brand loyalty and high customer preferences are the key factors that enable AT&T to retain its position in the market. The important element is to increase the product line of the company and ensures varieties of products that can increase the business of AT&T .
The bargaining power of customer is high in telecommunication industry so it is essential to provide high quality services at low price. The competition also increases the bargaining power of customers as it provides option to switch the product. AT&T realizes the bargaining power of customers and prepares strategies to attract customers. The marketing team of the company always collects information regarding the emergence of new technology, market trends, and customer views to present a report to the production managers. The production managers analyses the need of such changes and incorporate in the production process to ensure high customer satisfaction. Also, the leaders and managers of AT&T focus on making changes in the strategies to fulfill maximum requirements as indicated by the customers .
The bargaining power of suppliers is high in this industry as the nature of the business is to provide high quality products and services to its valuable customers. AT&T always purchases equipment and cables from the suppliers and distributors who are considered as the giants of providing such products. AT&T is an international organization that is entitled to purchase high quality material for its products. However, it has contracted with variety of suppliers of the world to provide high quality equipment as this is the only reason for the long-term sustainability of the organization in the market. The competition is high in the market especially after the patent had expired and the competitors were able to capture wide market range. Currently, the major competitors of AT&T are Verizon Communication, T-Mobile, and Sprint Corporation. They all are providing homogeneous and differentiated products in the market. Although the pricing strategy of AT&T is low as compared to its customers, it should have potential control in increasing its market share by providing reliable products and services to its worldwide customers .
The history reveals that AT&T had badly affected due to the economic recession in 2008. The company managed it by introducing new products and services such as wireless and video related products. The company had also managed its operation to reduce the effect of political instability and laws and regulations that were noticed to affect the business. It has eventually moved towards digital technology including wireless services when realized that landline phones are not applicable for the modern era. Also, the company introduced some new technological advancement products that can attract customers and reduce the risks and threats of external threats. AT&T always analyzes the social factors as they are directly connected with the preferences of customers. However, it was difficult for AT&T to satisfy all types of customers with a single product but the company tried to incorporate changes that were demanded by customers at large. It shows that the company is well-known of customers’ preferences and tries to reduce their reservations by providing reliable services and innovative products .
Strategic Issues of AT&T
The management of AT&T is moving in the designed direction but there are some issues that should be resolved to ensure effective outcomes. These issues are established due to the external factors.
Old Traditional Products
AT&T also provides traditional products that are out of fashion in the modern era. It has eliminated television from the product line but there are some devices that need to be replaced after its maturity. However, the sales of those products are declining at a lower rate but they should be avoided as the new generation is looking forward for fast and compact devices. In short, the company has stocks of traditional products that put adverse impact on the value proposition .
Avoidance of Legal Requirements
AT&T had suffered a great loss due to the expiry of patents in 1984 that resulted in the splitting of small companies. The credibility of the company was damaged and customers were moving towards other substitutes while having a strong brand image in the market. The legal requirements led the company to change the structure and that was difficult to manage and control. There was no adequate control over the expiry of patents and the company responded late in realizing its importance. The legal management is weak in controlling and analyzing the essentiality of these regulations and laws .
Late Adoption of Market Trends
The trends are changing rapidly in the market but the company collects information from the customers and then incorporates required changes in the production process. AT&T has no pre-research techniques to identify the trends prevailing in the market. The lack of estimations and expectations of the market trends and demand did not allow the company to gain competitive advantage while maintaining its brand reputation in the market .
Lack of Short-term Extension and Expansion Plans
AT&T has long-term plans for increasing the business of business. It identifies the requirements of the products and analyzes the market in which it intends to enter. It should have short-term plans to improve products and services of the company and allow stakeholders to get high returns on their small investment. Also, short-term investments and expansion of business have high risks so the company could face variety of challenges in the overall period .
Pricing and Product Strategy
The pricing and product strategy of AT&T are maintained and implemented according to the competition in the market. However, it is essential to develop a brand by providing high quality products and services irrespective of the price. It is also important that all the customers in the market are not price conscious and they prefer to have high speed internet services. AT&T lacks in aligning its product and pricing strategy to obtain high market share .
Recommended Tactics
Extension of Product Line
The technological advancement has brought a big change in the modern era so it is important to develop a brand by eliminating the traditional devices and incorporate new products that can satisfy maximum needs of customers. The extension will result in increasing valuable customers and the volume of sales of the company would increase with a high pace.
Fulfill Legal Requirements
A company should keep assessing and realizing the legal laws and regulations to make a smooth move towards success. AT&T had bad experience due to this factor so it should focus on the legal requirements consistently to avoid difficulties in the coming period. The pre-planned strategy is required to reduce the risks that can harm the company extensively and are obstacles in the growth.
Conclusion
The strategic audit has highlighted some issues that need to control for the success of the business. AT&T has high market share and strong brand image in the market so the customers are expecting some changes that need to incorporate in the first instance. Moreover, it can be observed that the company has an effective management that can eventually control the overall operation by using tactics and techniques. The recommended tactics are useful in improving the business of the company as they are associated with the alignment of products and services provided by the company. AT&T can further improve its financials and brand reputation by incorporating the above provided tactics.
References
AT&T. (2016, May 20). AT&T - DirecTV, Wireless, Cell Phones, U-verse & Internet. Retrieved from https://www.att.com/
Hill, C. W., Jones, G. R., & Schilling, M. A. (2014). Strategic Management: Theory: An Integrated Approach. Cengage Learning: Mason.
Hill, C., & Jones, G. (2009). Strategic Management Theory: An Integrated Approach. Mason: Cengage Learning.
Lewis, P., Goodman, S., Fandt, P., & Michlitsch, J. (2006). Management: Challenges for Tomorrow's Leaders. Mason : Cengage Learning.
